The Senate met at 10:00 a.m.

A quorum was present.

The prayer was offered by Rev. David P. Jones, Senate Chaplain.

Senator Krueger led the Pledge of Allegiance.

The Committee on Enrolled Bills has examined and found correctly Enrolled the following entitled House and/or Senate Bill:

HB 80, making technical corrections in the banking laws.

HB 244, relative to the corporate charter of the Laconia Airport Authority.

HB 249, relative to the membership of the rivers management advisory committee.

HB 250, relative to authorized regional enrollment area schools.

Senator Disnard moved adoption.

HB 90, removing the prohibition on adoption and foster parenting by homosexual persons. Public Institutions, Health and Human Services Committee. Vote 5-1. Ought to Pass, Senator Wheeler for the committee.

HB 307, establishing a committee to study the negotiated risk agreements when patients desire to remain in a facility over the recommendations of the department of health and human services. Public Institutions, Health and Human Services Committee. Vote 6-0. Ought to Pass, Senator Gordon for the committee.

HB 358, relative to the term of office for members of the state board of education. Education Committee. Vote 9-0. Ought to pass with amendment, Senator Squires for the committee.

1999-0871s

04/10

Amend RSA 21-N:10, III as inserted by section 1 of the bill by replacing it with the following:

3. The governor and council shall appoint the members of the board. Five of the members shall be selected one each from the 5 executive councilor districts and 2 members shall be selected from the public at large. Terms of office of members shall be for [5] 4 years from the January 31 on which the terms of their predecessors expired. Annually, on or before January 31, the governor shall name a member of the board who shall serve as [chairman] chairperson for one year and until [his] a successor is appointed. No member of the board shall serve more than [2] 3 consecutive full terms.

SB 129-L, requiring towns to disclose any reimbursements received to offset special education expenditures. Education Committee. Vote 9-0. Ought to pass with amendment, Senator Gordon for the committee.

1999-0870s

04/10

Amend the title of the bill by replacing it with the following:

AN ACT requiring school districts to disclose any reimbursements received to offset special education expenditures.

Amend the bill by replacing all after the enacting clause with the following:

1 New Section; Actual Expenditures for Special Education. Amend RSA 32 by inserting after section 11 the following new section:

32:11-a Actual Expenditures for Special Education Programs and Services. Each school district shall provide in its annual report an accounting of actual expenditures by the district for special education programs and services for the previous 2 fiscal years. Such accounting shall include offsetting revenues from all sources, including but not limited to, reimbursements from state funds, federal funds, or medicaid funds, private or other health insurance coverage, transferred special education moneys received from another school district, and any other special education resources received by the district.

2 Effective Date. This act shall take effect 60 days after its passage.

1999-0870s

AMENDED ANALYSIS

This bill requires that school districts disclose the amount of any reimbursements received to offset special education expenditures.

SB 11-FN, relative to the filing fee for securities in a combined prospectus offered for sale in New Hampshire by a mutual fund. Finance Committee. Vote 8-0. Ought to Pass, Senator Klemm for the committee.

SB 47-FN, relative to compensation for time lost by fish and game conservation officers for injuries received in the line of duty, and restoring certain leave time for a conservation officer injured while on duty on August 19, 1997. Finance Committee. Vote 8-0. Ought to Pass, Senator F. King for the committee.

SB 134-FN, relative to medicaid reimbursement rates and dental care. Finance Committee. Vote 8-0. Ought to Pass, Senator McCarley for the committee.

SB 145-FN, relative to state financial aid for state fairs, and making an appropriation therefor. Finance Committee. Vote 7-0. Ought to Pass, Senator McCarley for the committee.

SB 170-FN-A, establishing a parents as teachers pilot program in Sullivan county and making an appropriation therefor. Finance Committee. Vote 8-0. Ought to Pass, Senator Larsen for the committee.

SB 176-FN-A, relative to technology support for individuals and making an appropriation therefor. Finance Committee. Vote 7-0. Ought to pass with amendment, Senator Hollingworth for the committee.

1999-0887s

04/10

Amend the bill by replacing section 2 with the following:

2 Appropriation. Notwithstanding the provisions of RSA 106-H:9, the sum of $500,000 is hereby appropriated, for the fiscal year ending June 30, 2000, from funds held in the enhanced 911 system fund established in RSA 106-H:9 to the department of health and human services, for the purposes of this act.

1999-0887s

AMENDED ANALYSIS

This bill makes an appropriation of $500,000, from funds in the enhanced 911 system fund established in RSA 106-H:9, to the department of health and human services to provide technology support, assistive devices, information, and training programs to individuals with disabilities.

SB 186-FN, relative to additional cost of living adjustments for certain retired group II firemen. Finance Committee. Vote 8-0. Ought to pass with amendment, Senator J. King for the committee.

1999-0894s

10/01

Amend the title of the bill by replacing it with the following:

AN ACT relative to additional cost of living adjustments and increased minimum allowances for certain retired group II members, and relative to requiring spousal acknowledgement of a member’s election of an optional retirement allowance.

Amend the bill by replacing all after the enacting clause with the following:

1 Service Retirement; Group II; Minimum Allowance Increased. Amend RSA 100-A:5, II (c) (1) to read as follows:

(c)(1) Notwithstanding any provision of RSA 100-A to the contrary, any group II member who has retired on a full service retirement allowance shall receive a minimum service retirement allowance of [$5,200] $10,000. In comparing the minimum service retirement allowance and the full service retirement allowance, the full service retirement allowance shall be the sum of the basic allowance plus COLA's. The provisions of this subparagraph shall not apply to a group II member who has retired on a reduced or on a vested deferred retirement allowance. In the case of a group II member who has retired on a full service retirement allowance, and who has elected to convert the retirement allowance into an optional allowance for the surviving spouse under RSA 100-A:13, the surviving spouse shall be entitled to a proportional share of the [$5,200] $10,000 which shall be based upon the optional allowance which the surviving spouse is receiving. Under no circumstances shall the provisions of this subparagraph be construed to reduce the retirement benefits being paid to a group II member as of the effective date of this subparagraph.

2 Optional Allowances; Spousal Acknowledgement of Election. Amend RSA 100-A:13, I to read as follows:

I. Any member who has reached service retirement age as provided in RSA 100-A:5, I(a), or II(a), or RSA 100-A:19-b, or any retiree within 120 days after the effective date of retirement, may elect to receive, instead of the retirement allowance otherwise payable, a retirement allowance of equivalent actuarial value under one of the options named in paragraph III, or to redesignate any such option previously elected. When the member elects to receive an optional retirement allowance under paragraph III, the beneficiary or beneficiaries whom he nominates may include the member's children, with the reduced retirement allowance payable to be divided equally among the children. The notice of election or change of retirement option shall be on a form designated by the board, and which shall include a spousal acknowledgment with signature, if any election or change by the member. The optional allowance shall be effective upon retirement if the election is made before the effective date of retirement, and on the first day of the month following receipt by the board of the notice of election or change of option if made during the 120-day grace period. When an election or change of option is made during the 120-day grace period, no retroactive adjustments will be made in payments already received by the retiree. After expiration of the 120-day grace period no change in option selection shall be permitted except as provided in paragraph II. If a retiree dies after filing notice of election or change of option during the 120-day grace period but before the effective date, the election or change shall be effective as of the date of death. If a member dies after filing an election for a survivorship retirement option and before the effective date of retirement, whether or not the member has filed for retirement, the beneficiary who was nominated by the member in the election of the option may elect to receive either the optional survivor benefit which the member had elected or the ordinary death benefit provided under RSA 100-A:9, whichever is more advantageous to the beneficiary; provided that, in the case of the member's death before retirement, if the beneficiary named in the survivorship option election is not the same person as the beneficiary under RSA 100-A:9, then the death benefit under RSA 100-A:9, II, and not the survivorship option shall apply.

3 New Section; Supplemental Allowances for Certain Retired Group II Members. Amend RSA 100-A by inserting after section 41-a the following new section:

100-A:41-b Supplemental Allowances for Certain Retired Group II Members.

I. An eligible retired group II member of the New Hampshire retirement system, or beneficiary, whose annual retirement allowance as reported on the member’s Internal Revenue Service Form 1099-R was less than $17,700 and who retired on or before June 30, 1998, shall receive an additional allowance or a $10,000 minimum service retirement allowance whichever is greater, as provided in paragraph II and RSA 100-A:5, II. An eligible retired group II member shall be a member, or beneficiary of such member, who retired with at least 20 years of creditable service under RSA 100-A:5, II, or member, or beneficiary of such member, who retired under RSA 100-A:6, II. The provisions of this section shall not apply to a group II member who has retired on a reduced or vested deferred retirement allowance. The additional allowance shall become a permanent addition to each member or beneficiary’s base retirement allowance, as provided in RSA 100-A:41-a.

II. The supplemental allowance, or COLA, provided in paragraph I shall be the following percent increase for the following annual reported retirement allowance of each member:

(a) $15,700 - $17,699, 3 percent;

(b) $13,700 - $15,699, 4 percent;

(c) $11,700 - $13,699, 5 1/2 percent;

(d) $9,700 - $11,699, 7 1/2 percent;

(e) $7,700 - $9,699, 10 percent;

(f) $5,700 - $7,699, 14 percent; or

(g) Less than $5,700, 21 percent.

4 Funding of Supplemental Allowances. The total actuarial cost of the additional allowances provided in RSA 100-A:41-b as inserted by section 3 of this act shall be funded on a terminal basis from the special account established in RSA 100-A:16, II(h).

5 Repeal. RSA 100-A:5, II(c)(2) and (3), relative to the reduction in minimum service retirement allowance due to federal social security benefits or other benefits, are repealed.

6 Effective Date. This act shall take effect July 1, 1999.

1999-0894s

AMENDED ANALYSIS

This bill increases the minimum allowance and grants additional COLAs to retired group II members whose annual retirement allowance is less than a certain amount. The additional COLAs are funded on a terminal basis from the special account.

The bill also adds a requirement of spousal acknowledgment for a member’s election or change of an optional allowance.

SB 187-FN-L, relative to payment of group health insurance premiums for eligible retired teachers in the New Hampshire retirement system. Finance Committee. Vote 8-0. Ought to Pass, Senator Larsen for the committee.

SB 207-FN, relative to authorizing bonds for the construction and renovation of regional vocational education centers. Finance Committee. Vote 8-0. Ought to Pass, Senator Larsen for the committee.

SB 216-FN, allowing veterans the right to purchase credit in the retirement system for certain service in the armed forces. Insurance Committee. Vote 3-0. Ought to Pass, Senator J. King for the committee.

SB 24, extending the application of certain provisions of the child protection act to all children in out-of-home placements. Judiciary Committee. Vote 4-0. Ought to Pass, Senator Gordon for the committee.

HB 229, changing the registration fee requirement of the commercial feed law. Wildlife and Recreation Committee. Vote 4-0. Ought to Pass, Senator Roberge for the committee.

HB 238-FN-A, allowing the production and sale of American ginseng in the state of New Hampshire and making an appropriation therefor. Wildlife and Recreation Committee. Vote 4-0. Ought to Pass, Senator Klemm for the committee.

HB 418, relative to accounts and reporting dates of certain funds in the fish and game department. Wildlife and Recreation Committee. Vote 3-0. Ought to Pass, Senator D'Allesandro for the committee.

HB 520, relative to an open season for chukar partridge. Wildlife and Recreation Committee. Vote 3-0. Ought to Pass, Senator Disnard for the committee.

Senator Pignatelli offered the following resolution:

1999 SESSION

99-1037

04/09

ANALYSIS

99-1037

04/09

STATE OF NEW HAMPSHIRE

Whereas, this terrible tragedy has shaken and outraged the people of New Hampshire, including the 24 members of the New Hampshire Senate; now, therefore, be it

Resolved by the Senate:

That the membership sincerely expresses its deepest heartfelt sympathy to the families of those who died, and to the injured victims and their families, and to the citizens of Littleton; and

That copies of this resolution be forwarded by the Senate clerk to the mayor of Littleton and the governor of the state of Colorado.

Senator F. King moved to have HB 112, increasing the tobacco tax and imposing the tax on all types of tobacco products, taken off the table.

HB 112, increasing the tobacco tax and imposing the tax on all types of tobacco products.

Senator F. King offered a floor amendment.

Sen. F. King, Dist. 1

Sen. Gordon, Dist. 2

Sen. Johnson, Dist. 3

Sen. Fraser, Dist. 4

Sen. Roberge, Dist. 9

Sen. Squires, Dist. 12

Sen. Francoeur, Dist. 14

Sen. Krueger, Dist. 16

Sen. Brown, Dist. 17

Sen. Russman, Dist. 19

Sen. Klemm, Dist. 22

1999-0943s

04/09

Floor Amendment to HB 112-FN-A

Amend the title of the bill by replacing it with the following:

Amend the bill by replacing all after the enacting clause with the following:

1 Purpose; Intent.

I. In December 1997, the New Hampshire supreme court in the Claremont II decision ruled that it is the state’s duty to define and provide all New Hampshire’s public school students with an adequate education, and further that the manner of raising revenue to pay for an adequate education be through a system of taxation that is proportional in substance and just and reasonable in application.

II. Through the passage of House Bill 1075, the general court defined an adequate education. The definition grew out of work undertaken in the early 1990’s to develop curriculum frameworks which specifically address the importance of establishing and measuring what all New Hampshire students should know and be able to do. The curriculum frameworks were developed with the widespread participation of educators, business people, government officials, community representatives, and parents. They have evolved into a critical component of providing a quality public education to New Hampshire students.

III. The New Hampshire educational improvement and assessment program ("NHEIAP") tests were developed in conjunction with the curriculum frameworks as a measure of student performance. The general court therefore finds that the NHEIAP tests are a measure of student performance and can be used to develop and implement effective methods for assessing learning and its application. The general court further finds that in determining the cost of a constitutionally adequate education, performance based outcome criteria, specifically the NHEIAP test scores, can be used to identify school districts that are delivering such a constitutionally adequate education. The NHEIAP tests are comprehensive and difficult. Students taking these tests in the third, sixth, and tenth grades are scored on 4 levels of performance: novice, basic, proficient, and advanced. The general court finds that students who score in the basic, proficient, and advanced levels on these state tests are making progress toward achieving the goals set forth in House Bill 1075.

IV. The general court recognizes the inherent imprecision, subjectivity, and difficulty in determining the cost of an adequate education. Numerous complex financial, budgetary, administrative, and educational elements must be in place in order for the state to fully meet the mandates of Claremont II. Those mandates coupled with the policy of the state recognize that an adequate public education is not a static concept removed from the demands of an evolving world. An adequate education transcends mere competence in the reading, writing and arithmetic. Such an education shall provide all students with a meaningful opportunity to acquire the knowledge and skills necessary to prepare them for successful participation in the social, economic, scientific, technological, and civic realities of society, now and in the years to come. To ensure these fundamental rights, as recognized by the court, thoughtful and deliberate long-range planning with the involvement of many sources of expertise as well as phased-in implementation of the major elements over time is required. Concomitantly, such planning and implementation is required in order to ensure:

(a) That the educational needs of all children are met, including regular education students, students with special needs such as students with disabilities, students who are economically disadvantaged or are otherwise educationally at risk, or those who are intellectually gifted;

(b) That the needed changes are long-term in nature, truly embedded on the local and state level, gain acceptance and are both cost and educationally effective, and to those ends address underlying or systemic issues; and

(c) That compliance with all applicable federal laws occurs.

(d) That state sources of funding shall be sustainable and originate from taxes that are fair and just to citizens and businesses. That local spending decisions should remain under the control of the voters in each of the school districts. In those districts where there has been a strong commitment to education, even at the expense of other community programs, state funding should be able to be used for property tax relief if the local citizens decide not all of the additional funding is needed for the schools.

V. Under Claremont II, and as recently reaffirmed by the court in its November 1998 opinion, a funding system for a constitutionally adequate education must be put in place. This bill provides for a constitutionally adequate education that is reasonably and proportionally funded through a combination of revenue sources.

VI. However, in order to meet the aforementioned competing requirements of a long-range, carefully planned, and phased-in solution and to address the need to have an acceptable system in place, this act establishes special commissions to develop long-term plans and solutions to comprehensively and permanently meet constitutional mandates, and to undertake a review of the state’s tax structure.

2 Cigarette Tax. Amend RSA 78:7 to read as follows:

78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of [37] 47 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the tobacco products in which such products usually are sold at retail. The word "package" as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.

3 Applicability. Section 2 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective on the effective date of section 2 of this act, shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J. The treasurer shall deposit the tax revenue obtained from the 10 cent increase in the cigarette tax under RSA 78:7 as inserted by section 2 of this act into the dedicated fund established in RSA 31-A:7 to reduce the transfer of costs to municipalities.

4 New Subparagraph; Education Trust Fund. Amend RSA 6:12, I by inserting after subparagraph (vvv) the following new subparagraph:

(www) Money received under RSA 198:47, and from the sweepstakes fund, which shall be credited to the education trust fund under RSA 198:39.

5 Gender Reference Change. Amend the introductory paragraph of RSA 21-J:3 to read as follows:

In addition to the powers, duties, and functions otherwise vested by law, including RSA 21-G, in the commissioner of the department of revenue administration, [he] the commissioner shall:

6 Duties of Commissioner. Amend RSA 21-J:3, V to read as follows:

V. Exercise general supervision over the administration of the assessment and taxation laws of the state, the appraisal for ad valorem taxation purposes of property within the state, and over all assessing officers in the performance of their duties, except the board of tax and land appeals, to the end that all assessments of property be made in compliance with the laws of the state.

7 Duties of Commissioner. Amend RSA 21-J:3, XIII to read as follows:

XIII. Equalize annually by March 31 the valuation of the property in the several towns, cities, and unincorporated places in the state by adding to or deducting from the aggregate valuation of the property in towns, cities, and unincorporated places such sums as will bring such valuations to the true and market value of the property, including the equalized value of property formerly taxed pursuant to the provisions of RSA 72:7; 72:15, I, V, VII, VIII, IX, X, and XI; 72:16; 72:17; 73:26; 73:27; and 73:11 through 16 inclusive, which were relieved from taxation by the laws of 1970, 5:3; 5:8; 57:12; and 57:15, the equalized valuation of which is to be determined by the amount of revenue returned in such year in accordance with RSA 31-A, and by making such adjustments in the value of other property from which the towns, cities, and unincorporated places receive taxes or payments in lieu of taxes as may be equitable and just, so that any public taxes that may be apportioned among them shall be equal and just. In carrying out the duty to equalize the valuation of property, the commissioner shall follow the procedures set forth in RSA 21-J:9-a.

8 New Paragraph; Duties of Commissioner. Amend RSA 21-J:3 by inserting after paragraph XXIV the following new paragraph:

XXV. Petition the board of tax and land appeals to issue an order for reassessment of property pursuant to the board's powers under RSA 71-B:16 - 19 whenever, in the commissioner's belief, the valuation of property for equalization purposes in a particular city, town, or unincorporated place is disproportional to the valuation for equalization purposes in other cities, towns, or unincorporated places in the state.

9 Division of Property Appraisal; Department of Revenue Administration. RSA 21-J:9 is repealed and reenacted to read as follows:

21-J:9 Division of Property Appraisal. There is established within the department the division of property appraisal, under the supervision of a classified director of property appraisal who shall be responsible for the following functions, in accordance with applicable laws:

I. Assisting and supervising municipalities and appraisers in appraisals and valuations as provided in RSA 21-J:10 and RSA 21-J:11.

II. Appraising state-owned forest and recreation land under RSA 227-H and RSA 216-A.

III. Annually determining the total equalized valuation of properties in the cities and towns and unincorporated places according to the requirements of RSA 21-J:9-a.

IV. Preparing a standard appraisal manual which may be used by assessing officials, and holding meetings throughout the state with such officials to instruct them in appraising property.

10 New Section; Equalization Procedure. Amend RSA 21-J by inserting after section 9 the following new section:

21-J:9-a Equalization Procedure. The following procedures shall apply in determining the equalization of property within the cities, towns, and unincorporated places as required by RSA 21-J:3, XIII:

I. The commissioner shall annually conduct a sales-assessment ratio study which shall include arm’s length sales or transfers of property that occurred 6 months prior to and 6 months following April 1 of the tax year for which such equalization is made.

II. In determining the arm's length sales or transfers that are included in the sales-assessment ratio study, the commissioner may use a randomly selected sample of such sales and transfers the size of which shall be determined by the total taxable parcels in the city, town, or unincorporated place.

III. If less than 2 percent of the total taxable parcels in a city, town, or unincorporated place has been transferred by an arm's length sale or transfer during the 6 months prior to and 6 months following April 1 of the tax year for which such equalization is made or the commissioner determines the sales are not representative of the property within the municipality, the commissioner may choose one or more of the following options:

(a) Include appraisals of any of the taxable property of such city, town, or unincorporated place in the sales-assessment ratio study. Such appraisals shall be based on full and true market value pursuant to RSA 75:1 and shall be performed by department appraisers. The property to be appraised shall be selected by the commissioner.

(b) Consider recent equalization ratio activity in adjoining cities, towns, or unincorporated places.

(c) Include arm's length sales or transfers in the city, town, or unincorporated place, within 2-1/2 years preceding April 1 of the year preceding the tax year for which such equalization is made.

IV. The commissioner shall use the inventory of property transfers authorized by RSA 74:18 in determining the equalized value of property and may consider such other evidence as may be available to the commissioner on or before the time the final equalized value is determined.

11 New Subdivision; Municipal Services Assistance Grants. Amend RSA 31-A by inserting after section 6 the following new subdivision:

Municipal Services Assistance Grants

31-A:7 Intent; Establishment. The general court recognizes the obligations of municipal governments to provide necessary and desirable services to their citizens, including new or expanded programs, and hereby finds that to the extent that changes in state tax policy could have the effect of unduly limiting municipal governments in carrying out their obligations, it is appropriate to provide encouragement and support to those political subdivisions in the form of grants. The general court further recognizes that the hardships attendant to increased taxes that are placed on low income residents and those providing shelter and services to those citizens result in increased burdens on municipal governments in a number of ways including but not limited to difficulty or impossibility of funding new or expanded programs, fewer housing starts and rental property construction for people of modest means, and less disposable income being available to the elderly and poor, thereby creating a greater need for municipal assistance. Therefore, the general court finds it to be in the interest of the public welfare to establish a municipal services assistance grant program to ameliorate, in part, such adverse consequences.

31-A:8 Definitions. In this subdivision:

I. "Commissioner" means the commissioner of the department of revenue administration.

II. "Municipality" means a city, town or unincorporated place.

III. "Municipal per capita income" means per capita income as reported by the department of revenue administration for each New Hampshire municipality.

IV. "State per capita income" means the median per capita income as reported by the department of revenue administration for the state of New Hampshire.

31-A:9 Determination of Municipal Services Assistance Grants.

I. The commissioner on or before October 1 shall determine the amount of municipal services assistance grant for each municipality for the next fiscal year as follows:

(a) Divide the amount of excess education property tax payments made by a municipality in the corresponding tax year by the total amount of excess education property tax payments made statewide by all municipalities in the corresponding tax year.

(b) Divide the result of the calculation in subparagraph (a) by the per capita income factor. The per capita income factor shall be obtained by dividing municipal per capita income by the median state per capita income for the corresponding tax year.

(c) Multiply the result of the calculation in subparagraph (b) by the total amount of funds in the municipal services assistance grant program.

II. The amount of municipal services assistance grant to a municipality under paragraph I of this section shall not exceed the amount of the excess education property tax payment made by a municipality for the corresponding tax year.

31-A:10 Distribution. Upon certification to the state treasurer by the commissioner, distribution of the municipal services assistance grants determined in RSA 31-A:9 shall be made by the state treasurer from sums appropriated therefor from the general fund. For the fiscal year ending June 30, 2000, such distribution shall be made on June 15, 2000. For fiscal years ending after June 30, 2000, such distribution shall be made at the time or times other payments are returnable to the municipalities pursuant to this chapter.

31-A:11 Biennial Review. The legislature shall biennially review the circumstances of municipalities relative to the intent of this subdivision to determine the need for providing assistance to such municipalities and shall adjust the amounts provided herein as it deems prudent.

12 Appraisals of Property for Ad Valorem Tax Purposes. RSA 21-J:11 is repealed and reenacted to read as follows:

21-J:11 Appraisals of Property For Ad Valorem Tax Purposes.

I. Every person, firm, or corporation intending to engage in the business of making appraisals on behalf of a municipality for tax assessment purposes in this state shall notify the commissioner of that intent in writing. No person, firm, or corporation engaged in the business of making appraisals of taxable property for municipalities and taxing districts shall enter into any contract or agreement with any town, city, or other governmental division without first submitting the proposed contract or agreement to the commissioner for examination and approval and submitting to the commissioner evidence of financial responsibility and professional capability of personnel to be employed under the contract.

II. The commissioner, at no expense to the municipality, shall monitor appraisals of property and supervise appraisers as follows:

(a) Assure that appraisals comply with all applicable statutes and rules;

(b) Assure that appraisers are complying with the terms of any appraisal contract;

(c) Review the accuracy of appraisals by inspection, evaluation, and testing, in whole or in part, of data collected by the appraisers; and

(d) Report to the governing body on the progress and quality of the municipality’s appraisal process.

III. The commissioner shall adopt rules under RSA 541-A relative to the provisions required of all contracts for appraisal services and the methodology for inspection, evaluation, and testing of data for the purposes of appraisal monitoring.

13 New Paragraph; Reports Required. Amend RSA 21-J:34 by inserting after paragraph XIV the following new paragraph:

XV. A report filed by the assessing officials of each city, town, and unincorporated place shall certify sales-assessment information necessary for the department to conduct the annual sales-assessment ratio study required by RSA 21-J:9-a. This report shall be filed within 45 days after receipt from the department.

14 Revenue Sharing. Amend RSA 31-A:4, I to read as follows:

15 Board of Tax and Land Appeals; Authority. Amend RSA 71-B:5, II to read as follows:

II. To hear and determine [any] appeals by towns relating to the [equalization of valuation performed] equalized valuation of property determined by the commissioner of revenue administration pursuant to RSA 21-J:3, XIII. Any town aggrieved by [an] its equalized valuation as determined by the commissioner of revenue administration must appeal to the board in writing within 30 days of [the town's notification] notice of [the] its final equalized valuation by the commissioner. The board shall hear and make a final ruling on such appeal within 45 days of its receipt by the board. The board’s decision on such appeal shall be final and not appealable.

16 New Paragraph; Order for Reassessment. Amend RSA 71-B:16, IV to read as follows:

IV. When a complaint is filed with the board alleging that all of the taxable real estate or taxable property in a taxing district should be reassessed or newly assessed for any reason, provided that such complaint must be signed by at least 50 property taxpayers or 1/3 of the property taxpayers in the taxing district, whichever is less[.]; or

V. When the commissioner of revenue administration files a petition with it pursuant to RSA 21-J:3, XXV.

17 New Section; Inventory of Property Transfers. Amend RSA 74 by inserting after section 17 the following new section:

74:18 Inventory of Property Transfers.

I. In order to properly equalize the value of property under RSA 21-J:3, XIII, an inventory of property transfers shall be filed with the department of revenue administration and with the municipality where the property is located for each transfer of real estate or interest in real estate. Each form may include the following information:

(a) The buyer and seller's names and post transaction addresses and the name and address of a contact person if the buyer or seller is a trust or corporation.

(b) A description of the exact location of the property by town, street, and the assessor’s map, lot, and block number.

(c) The acreage included in the sale.

(d) An accurate description of the property included in the sale, the neighborhood where the property is located, and the type and style of the property sold.

(e) The buyer's ownership interest in the property.

(f) The sale price, date of transfer, and the amount mortgaged.

(g) The description of the type of transfer that has taken place.

(h) The amount of personal property included in the sale price.

(i) Whether the property was previously occupied and whether the property will serve as the buyer's primary residence.

(j) The financing arrangements made to purchase the property to be answered at the option of the buyer.

(k) Whether any concessions were made in the sale.

(l) Whether the property was in current use.

(m) Whether land use taxes were considered in the sale.

(n) The buyer’s dated signature certifying that the information indicated on the form is true.

II. The inventory of property transfers required by this section shall be filed with the department of revenue administration and with the municipality where the property is located by the purchaser, grantee, assignee, or transferee, no later than 30 days from the recording of the deed at the register of deeds or transfer of real estate, whichever is later. Persons required to file the inventory of property transfers who willfully fail to file or willfully make false statements on the forms shall be guilty of a violation.

III. No deed, recording a transfer of real estate or any interest in real estate, executed before October 1, 1995, shall be required to comply with this section.

IV. Failure to comply with this section shall not be construed to cloud title.

V. Any information provided to the department or the municipality pursuant to this section shall be exempt from the right-to-know law, RSA 91-A.

18 Education Property Tax. RSA 76:3 is repealed and reenacted to read as follows:

76:3 Education Property Tax. An annual education property tax at the uniform rate of $7.00 on each $1,000 of the value of taxable property is hereby imposed on all persons and property taxable pursuant to RSA 72 and RSA 73, except such property subject to tax under RSA 82. On or before October 1 of the tax year, the commissioner of revenue administration shall equalize the rate of taxation for each municipality, except municipalities which have undergone a total revaluation of taxable property within the prior year, by multiplying the uniform rate by the municipality’s equalization ratio determined according to RSA 21-J:9-a.

19 What Taxes Assessed. Amend RSA 76:5 to read as follows:

76:5 What Taxes Assessed. The selectmen shall seasonably assess all state and county taxes for which they have the warrants of the [state] commissioner of revenue administration and county treasurers respectively; all taxes duly voted in their towns; and all school[, schoolhouse,] and village district taxes authorized by law or by vote of any school or village district duly certified to them; and all sums required to be assessed by RSA 33.

20 Commissioner’s Warrant. RSA 76:8 is repealed and reenacted to read as follows:

76:8 Commissioner’s Warrant.

I. The commissioner of revenue administration shall annually calculate the proportion of the education property tax to be raised by each municipality by multiplying the uniform education property tax rate by the total equalized assessed value of all property in the municipality as determined under RSA 21-J:3, XIII.

II. The commissioner shall issue a warrant under the commissioner’s hand and official seal for the amount computed in paragraph I to the selectmen or assessors of each municipality on or before September 1 directing them to assess such sum and pay it to the municipality for the use of the school district or districts and, if there is an excess education tax payment due under RSA 198:47, I, directing them to assess the amount of that excess education tax payment and pay it to the department of revenue administration for deposit in the education trust fund. The commissioner shall also issue a warrant under the commissioner’s hand and official seal for such sums and at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality.

III. All tax revenues collected pursuant to the education property tax shall be the property of the state, and each municipality who receives such funds shall serve as the collection agent of the state with respect to such funds. Each municipality shall dispose of such funds in accordance with paragraph IV.

IV.(a) Each municipality is hereby directed by the state to dispose of all tax revenues collected pursuant to the education property tax for any period as follows:

(1) That portion of such revenues that does not exceed the municipality’s state average per pupil education base, shall be paid to the municipality for use of the school district or districts:

(2) That portion of such revenues that exceeds the municipality’s average base per pupil cost shall be remitted to the state treasurer for deposit into the education trust fund.

(b) For purposes of this paragraph, the term average base per pupil cost means with respect to any municipality the product of:

(1) The average amount spent per pupil in the state for the immediately prior period as determined by the department of education; and

(2) The average daily membership in residence, as that term is defined in RSA 198:38, VI, for the municipality.

V. Each municipality shall be liable to the state for all taxes lawfully collected pursuant to the education property tax in such municipality. The education property tax shall be collected by all of the means and methods provided by law for the collection of property taxes. Nonpayment of the tax shall incur the same charges and interest as are imposed by law for nonpayment of local property taxes. Such charges and interest shall be payable by the municipality.

21 Commissioner’s Report. RSA 76:9 is repealed and reenacted to read as follows:

76:9 Commissioner’s Report. The commissioner of revenue administration shall report to the governor, the speaker of the house of representatives, the president of the senate, and the commissioner of education each year on or before October 1, a statement of the education property tax warrants to be issued for the tax year commencing April 1 of the succeeding year.

22 Information Required. Amend RSA 76:11-a, I to read as follows:

I. The tax bill which is sent to every person taxed, as provided in RSA 76:11, shall show the rate for municipal, [school] local education, state education, and county taxes separately, the assessed valuation of all lands and buildings for which said person is being taxed, and the right to apply in writing to the selectmen or assessors for an abatement of the tax assessed as provided under RSA 76:16. The department of revenue administration shall compute for each town and city the rates which are to appear on the tax bills and shall furnish the required information to the appropriate town or city.

23 Extent. Amend RSA 85:1 to read as follows:

85:1 Who May Issue. The state treasurer or the commissioner of revenue administration, and each county and town treasurer, may issue extents under their hands and seals respectively, in cases authorized by law, and such extents shall be deemed to be executions against the person and property.

24 New Subdivisions; State Aid for Educational Adequacy; Education Trust Fund; Commission. Amend RSA 198 by inserting after section 37 the following new subdivisions:

State Aid for Educational Adequacy; Education Trust Fund

198:38 Definitions. In this subdivision:

I. "Municipality" means a city, town, or unincorporated place.

II. "School district" means school district as defined in RSA 194:1 or RSA 195:1.

III. "Elementary school" means a school with any of the grades kindergarten through 8.

IV. "High school" means a school with any of the grades 9 through 12.

V. "Average base per pupil cost of an elementary school pupil" means the amount as determined in accordance with RSA 198:40.

VI. "Weighted pupils" means resident pupils weighted as follows:

(a) Every pupil, including kindergarten pupils, 1.0.

(b) A high school pupil, an additional weight of 0.2.

(c) An educationally disabled child, an additional weight of 1.0.

(d) An elementary pupil who is eligible to receive a free or reduced-price meal shall receive an additional weight as follows:

(1) If the pupil is in a district in which less than 12 percent of the elementary pupils are eligible to receive a free or reduced-price meal, and additional weight of zero.

(2) If the pupil is in a district where at least 12 percent but less than 24 percent of the elementary pupils are eligible to receive a free or reduced-price meal, an additional weight of 0.5.

(3) If the pupil is in a district in which at least 24 percent of the elementary pupils are eligible to receive a free or reduced-price meal, an additional weight of 1.0.

VII. "Educationally disabled child" means an educationally disabled child as defined in RSA 186-C:2, I.

VIII. "Consumer price index" means the consumer price index for all items for urban consumers for the Northeast published by the United States Department of Labor.

IX. "Average daily membership in attendance" means average daily membership in attendance as defined in RSA 189:1-d, III.

X. "Average daily membership in residence" and "resident pupils" mean the average daily membership in residence as defined in RSA 189:1-d, IV.

XI. "Transportation costs" means the costs of transporting pupils to and from school and other school activities reported by school districts on the MS-25 form.

198:39 Education Trust Fund Created and Invested.

I. The state treasurer shall establish an education trust fund in the treasury. Moneys in such fund shall not be used for any purpose other than to distribute adequate education grants to municipalities’ school districts pursuant to RSA 198:42 and make catastrophic aid payments under RSA 186-C:18, III(d). The state treasurer shall deposit into this fund immediately upon receipt:

(a) The full amount of excess property tax payments from the department of revenue administration pursuant to RSA 198:47.

(b) All moneys due the fund in accordance with RSA 284:21-j.

(c) The school portion of any revenue sharing funds distributed pursuant to RSA 31-A which were apportioned to school districts in the property tax rate calculations in 1998.

(d) Tobacco settlement funds in the amount of $30,000,000 annually.

(e) Any other moneys appropriated from the general fund.

II. The education trust fund shall be nonlapsing. The state treasurer shall invest that part of the fund which is not needed for immediate distribution in short-term interest-bearing investments. The income from these investments shall be returned to the fund.

198:40 Methodology for Calculating the Cost of an Adequate Education.

I. For the fiscal year beginning July 1, 1999, the average base per pupil cost of an elementary school pupil shall be $2,515.

II. For the fiscal year beginning July 1, 2000, the average base per pupil cost of an elementary school pupil shall be $3,018.

III. For the biennium beginning July 1, 2001, and every biennium thereafter, the average base per pupil cost of an elementary school pupil shall be established by the general court.

IV. If the general court makes no change in the average base per pupil cost of an elementary school pupil, the average base per pupil cost for the previous fiscal year shall be adjusted by the change in the consumer price index between the January immediately preceding the beginning of the fiscal year of distribution and the second preceding January. In making the calculations required by this subdivision in subsequent fiscal years, the department of education shall use the average daily membership in residence, special education costs, and transportation costs for the second preceding school year and the district percentage of pupils eligible to receive a free or reduced-priced meal reported to the department of education on October 1 of the second preceding calendar year.

V. The weighted average daily membership in residence for each district shall be calculated by combining the district’s elementary average daily membership in residence with its weighted high school average daily membership in residence, the district’s average daily membership in residence resulting from educationally disabled children, and the district’s additional average daily membership in residence resulting from elementary pupils eligible to receive a free or reduced-priced meal. The statewide weighted average daily membership in residence of pupils shall be calculated by combining the weighted average daily membership in residence of each school district in the state.

VI. For each fiscal year, the statewide cost of an adequate education for all pupils shall be calculated by multiplying the average base per pupil cost of an adequate education by the statewide weighted average daily membership in residence of pupils and then adding 70 percent of total statewide district transportation costs.

198:41 Determination of Adequate Education Grants.

I. Except for municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for the municipality as follows:

(a) Multiply the average base per pupil cost of an adequate education by the weighted average daily membership in residence for the municipality;

(b) Add to the product of subparagraph (a), 70 percent of the municipality’s apportioned transportation cost;

(c) Subtract from the sum of subparagraph (b) the amount of education property tax revenues to be paid to the municipality pursuant to RSA 76:8, IV(a) reported pursuant to RSA 76:9 for the next tax year.

II. For municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of revenue administration shall determine the amount of the adequate education grant for each municipality as the lesser of the following 2 calculations:

(a) The amount calculated in accordance with paragraph I of this section; or

(b) The total amount paid for items of current education expense as determined by the department of education minus the amount of the education property tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year.

198:42 Distribution Schedule of Adequate Education Grant.

I. The adequate education grant determined in RSA 198:41 shall be distributed to each municipality’s school district or districts from the education trust fund in 4 payments of 20 percent on July 1, 20 percent on September 1, 30 percent on January 1, and 30 percent on April 1 of each school year.

II. For the fiscal year ending June 30, 2000, an amount calculated by the commissioner of education necessary to fund the grants under RSA 198:41 is hereby appropriated from the education trust fund created under RSA 198:39 to the department of education.

III. The general court is constitutionally obligated to fund the cost of an adequate education, and there are hereby appropriated the funds necessary to make the payments required under RSA 198:41. The governor is authorized to draw a warrant for such sums out of any money in the treasury not otherwise appropriated.

IV. The department of education shall certify the amount of each grant to the state treasurer and direct the payment thereof to the school district. When a payment of a grant is made to a school district, the municipality on whose behalf the payment is made, shall receive notification from the state treasurer of the amount of the payment made to its school district or districts.

198:43 Additional Education Expenditures. School districts are authorized to develop educational programs beyond those required for an adequate education and to raise and appropriate amounts necessary for such programs.

198:44 Use of Funds for Education Purposes.

I. Annually, each school district shall appropriate an amount that equals or exceeds the amount necessary to fund an adequate education for the pupils in that district. Notwithstanding any other provision of law, in the event a school district fails to appropriate at least the required amount, that amount shall be assessed and collected by the municipality, appropriated to the school district, and expended for educational purposes in accordance with paragraph IV without a vote of the school district.

II. On or before June 30 of each year, the individual with fiscal responsibility in each municipality shall submit a statement to the commissioner of revenue administration and the commissioner of education that the funds collected by the municipality pursuant to RSA 76:8, including the portion of state education tax revenues that are paid directly to municipalities pursuant to RSA 76:8, IV(a) and the funds received from the state pursuant to RSA 198:42, have been paid over to the school district or districts to be expended for educational purposes in accordance with paragraph IV. The statement shall include the following: "I certify, under the pains and penalties of perjury, that all of the information contained in this document is true, accurate, and complete."

III. If a municipality uses any part of the funds collected pursuant to RSA 76:8 for non-educational purposes, the municipality shall pay to the school district an amount equal to the portion of funds used for such non-educational purposes.

IV. The funds collected by municipalities pursuant to RSA 76:8, including the portion of state education tax revenues that are paid directly to municipalities pursuant to RSA 76:8, IV(a) and the funds received from the state pursuant to RSA 198:42, and the funds received from the state pursuant to RSA 198:42 shall be appropriated by a school district only for current education expenses or transfers to reserves or trusts funds and shall not be used for any other purpose.

V. On or before June 30 of each year, the individual with fiscal responsibility in each school district shall submit a statement to the commissioner of revenue administration and the commissioner of education that an amount of money that equals the amount necessary to fund an adequate education for the pupils in that district was used in accordance with paragraph IV. The statement shall include the following: "I certify, under the pains and penalties of perjury, that all of the information contained in this document is true, accurate, and complete."

198:45 Duties of the Department of Education and the Board of Education.

I. The department of education shall, on or before September 30 of each year, collect from the school districts final data concerning all aspects of student attendance for the school year ending June 30 of that year necessary to establish the average daily membership, average daily membership in residence, and weighted average daily membership in residence, including the municipality of residence for each pupil for that year. The department of education shall submit a report by December 31 to the speaker of the house of representatives and the senate president to be used for purposes of determination by the legislature of the appropriation to the education trust fund. A copy of such report shall, at the same time, be given to the department of revenue administration.

II. The board of education shall adopt rules pursuant to RSA 541-A necessary to the proper administration of this subdivision.

198:46 Submission of Data by School Districts. Each school district shall submit all attendance information required by the department of education under this subdivision on or before September 30 of each year.

Adequate Education and

Education Financing Reform Commission

198:47 Adequate Education and Education Financing Reform Commission Established; Membership.

I. There is hereby established an adequate education and education financing reform commission which shall be composed of 19 members as follows:

(a) The chairpersons of the house education and house finance committees, appointed by the speaker of the house.

(b) The chairpersons of the senate education and senate finance committees, appointed by the president of the senate.

(c) Four members appointed by the governor, one of whom shall be an elementary or secondary special education teacher, one of whom shall be a primary teacher who does not teach special education, and one of whom shall be a member of the business community.

(d) The chancellor of the university system of New Hampshire or designee.

(e) The commissioner of the regional community-technical college system.

(f) One member from the state board of education, appointed by the chairperson of the state board of education.

(g) One member from a special education advocacy organization, appointed by such organization; and

(h) Seven members who shall be agreed to and jointly appointed by the governor, the president of the senate, and the speaker of the house consisting of the following:

(1) One local school board member, recommended by the New Hampshire School Boards Association.

(2) One school administrator, recommended by the New Hampshire School Administrators Association.

(3) One special education administrator at the elementary or secondary school level, recommended by the New Hampshire Association of Special Education Administrators.

(4) Two parents of school-age children, one of whom shall be the parent of a child with an educational disability.

(5) One member from the business community, who shall be associated with the School to Work Initiative.

(6) One school business official, recommended by the New Hampshire Association of School Business Officials.

II. The commission shall elect a chairperson from among its membership and shall form subcommittees necessary to perform its duties. The chairperson shall determine the frequency of meetings at its first meeting.

III. The members of the commission shall serve without compensation, provided that legislative members of the commission shall receive mileage at the legislative rate while attending to the duties of the commission, and provided that the parent members of the commission shall be reimbursed for travel expenses associated with their duties on the commission.

IV. In order to ensure that all students are provided an adequate education, the duties of the commission shall be as follows:

(a) Determine and recommend the costs of an adequate education for all students in New Hampshire by determining and calculating adjustments for individual school districts based on yearly inflation, cost of living variances, diseconomies of scale, transportation variability, demographics, including for school districts with a disproportionate number of students who are economically disadvantaged or have educational disabilities, and such other factors as deemed relevant.

(b) Determine and recommend the amount of state aid, including building aid, to be distributed to cities and towns based upon the cost of an adequate education as set forth in subparagraph (a) and the method for distributing the state aid.

(c) Recommend changes in policy and procedure in the areas of educational improvement and accountability.

(d) Recommend interim and permanent processes to ensure adequate planning and implementation at the local and state level of special education and educationally related services, including planning for and development, on an interagency basis, of local school based options for pupils who have been placed in alternative or separate schools who could be placed in appropriate less restrictive options if available.

V. The commission shall be divided into the following policy subcommittees: adequacy and cost, educational improvement and accountability, and special education funding.

VI. The commission shall report its findings and recommendations no later than December 1, 2000. The report shall include, for each recommendation, proposed implementation schedules with timelines, specific steps, agencies and persons responsible, and resources needed. Where feasible, all plans, measures and initiatives shall be proposed as legislation or regulation so that they will have the force of law. All recommendations and plans shall be designed to be fully implemented no later than September 1, 2004.

VII. The department of justice, department of revenue administration, department of education, and department of health and human services shall provide the commission with assistance.

25 Appropriation. The sum of $150,000 for the fiscal year ending June 30, 2000, is hereby appropriated for the purposes of the commission established in RSA 198:47 as inserted by section 24 of this act. This sum shall be nonlapsing until June 30, 2001. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

26 New Subparagraph; Special Education; Catastrophic Aid Payments. Amend RSA 186-C:18, III by inserting after subparagraph (c) the following new subparagraph:

(d) For each fiscal year beginning with the fiscal year ending June 30, 2000, $2,000,000 shall be appropriated from the education trust fund established in RSA 198:39 to the department of education to assist those school districts which, under rules adopted by the state board of education, qualify for emergency assistance in meeting special education catastrophic costs pursuant to this section.

27 Reference Added. Amend RSA 189:1-d, IV to read as follows:

IV. "Average daily membership in residence" means the average daily membership of students enrolled in public schools within the district or students whose tuition is being paid by the district, pursuant to RSA 186-C:10, to another approved public or private school for a given school district in a given school year.

28 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:7, I to read as follows:

I. If a cooperative school district was organized prior to July 1, 1963, during the first 5 years after the formation of a cooperative school district each preexisting district shall pay its share of all capital outlay costs and all operational costs in excess of the amount determined necessary to provide an adequate education under RSA 198:40 in accordance with either one of the following formulas as determined by a majority vote of the cooperative district meeting:

29 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:14, I(b) to read as follow:

(b) The commissioner of revenue administration shall examine such certificates and delete any appropriations which appear not made in accordance with the law, and adjust any sum, in accordance with RSA 21-J:35, which may be used as a setoff against the amount appropriated when it appears to the commissioner of revenue administration such adjustment is in the best public interest. The commissioner of revenue administration shall apply the total amount of all adequate education grants received pursuant to RSA 198:42.

30 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:18, III(e) to read as follows:

(e) The method of apportioning [the] all operating expenses in excess of the amount determined necessary to provide an adequate education under RSA 198:40, of the cooperative school district among the several preexisting districts and the time and manner of payment of such shares. Home education pupils who do not receive services from the cooperative school district, except an evaluation pursuant to RSA 193-A:6, II, shall not be included in the average daily membership relative to apportionment formulas.

31 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:18, IX to read as follows:

IX. The organization meeting of a cooperative school district shall be called to order by the chairperson of the cooperative school district planning board, or by the clerk-treasurer thereof, who shall serve as temporary chairperson for the first order of business which shall be the election of a moderator and of a temporary clerk, by ballot, who shall be qualified voters of the district. From and after the issuance of the certificate of formation by the board to the date of operating responsibility of the cooperative school district, such district shall have all the authority and powers of a regular school district for the purposes of incurring indebtedness, for the construction of school facilities and for such other functions as are necessary to obtain proper facilities for a complete program of education. When necessary in such interim, the school board of the cooperative school district is authorized to prepare a budget and call a special meeting of the voters of the district, which meeting shall have the same authority as an annual meeting, for the purpose of adopting the budget, making necessary appropriations, and borrowing money. Whenever the organization meeting is held on or before April 20 in any calendar year, no annual meeting need be held in such calendar year. Sums of money raised and appropriated at the organization meeting or any interim meeting prior to the first annual meeting shall be forthwith certified to the commissioner of revenue administration and the state department of education upon blanks prescribed and provided by the commissioner of revenue administration for the purpose, together with a certificate of estimated revenues, so far as known, and such other information as the commissioner of revenue administration may require. The commissioner of revenue administration shall examine such certificates and delete any appropriations which appear not made in accordance with the law, and adjust any sum which may be used as a setoff against the amount appropriated when it appears to the commissioner such adjustment is in the best public interest. The commissioner of revenue administration shall apply the total amount of all adequate education grants received pursuant to RSA 198:40 as a setoff against the amount appropriated. The commissioner of revenue administration shall certify to the state department of education the total amount of taxes to be raised for said cooperative school district and the state department of education shall determine the proportional share of said taxes to be borne by each preexisting school district and notify the commissioner of revenue administration of its determination. Upon certification by the commissioner of revenue administration the selectmen of each town shall seasonably assess the taxes as provided by law. The selectmen shall pay over to the treasurer of the cooperative district such portion of the sums so raised as may reasonably be required according to a schedule of payments needed for the year as prepared by the treasurer and approved by the cooperative school board, but no such payment shall be greater in percentage to the total sum to be raised by one local district than that of any other local district comprising such cooperative school district.

32 Reference Change. Amend RSA 193:1, I(c) to read as follows:

(c) The relevant school district superintendent has excused a child from attendance because the child is physically or mentally unable to attend school, or has been temporarily excused upon the request of the parent for purposes agreed upon by the school authorities and the parent. Such excused absences shall not be permitted if they cause a serious adverse effect upon the student's educational progress. Students excused for such temporary absences may be claimed as full-time pupils for purposes of calculating state aid under RSA 186-C:18 and [RSA 198:27-37] adequate education grants under RSA 198:41.

33 Reimbursement Anticipation Notes; Version Effective Until July 1, 1999. Amend RSA 198:20-d to read as follows:

198:20-d Reimbursement Anticipation Notes. Notwithstanding any other provision of law to the contrary, a school district may incur debt in anticipation of reimbursement under RSA 186-C:18 and under RSA 198:42. The governing body, after receiving authorization for borrowing from the legislative body, may elect to recognize the proceeds of the borrowing as revenue for property tax rate setting purposes by providing written notification, prior to September 1, to the commissioner of the department of revenue administration stating the specific amount of borrowing to be recognized as revenue.

34 Reimbursement Anticipation Notes; July 1, 1999 Version. Amend RSA 198:20-d to read as follows:

198:20-d Reimbursement Anticipation Notes. Notwithstanding any other provision of law to the contrary, a school district may incur debt in anticipation of reimbursement under RSA 186-C:18 and under RSA 198:42. The governing body, after notice and public hearing, may elect to borrow such funds and to recognize the proceeds of the borrowing as revenue for property tax rate setting purposes by providing written notification, prior to September 1, to the commissioner of the department of revenue administration stating the specific amount of borrowing to be recognized as revenue. Any borrowing under this section shall be exempt from the provisions of RSA 33, relative to debt limits.

35 Alternative Foundation Aid; Calculation of Per Pupil Amount Amended. Amend RSA 198:36 to read as follows:

IV. The foundation aid amount shall be [$4,000] $4,357 per weighted pupil.

36 Sweepstakes. RSA 284:21-j is repealed and reenacted to read as follows:

284:21-j Establishment. The state treasurer shall credit all moneys received from the sweepstakes commission, and interest received on such moneys, to a special fund from which the treasurer shall pay all expenses of the commission incident to the administration of this subdivision and RSA 287-E. Any balance left in such fund after such expenses are paid shall be deposited in the education trust fund established under RSA 198:39.

37 Transition. As of July 1, 1999, all funds, from any source derived, which would be distributed as foundation aid shall be deposited in the education trust fund under RSA 198:39, including the $62,000,000 appropriated under 1998, 389:16, II.

38 Payment in Lieu of Taxes. Amend RSA 227-H:17 to read as follows:

227-H:17 Payment in Lieu of Taxes. The commissioner of revenue administration shall adopt rules, pursuant to RSA 541-A, relative to forms for application to the commissioner of revenue administration for payment for lost taxes. [In any year in which no state tax is levied,] Any town in which national forest lands and land held by the state for operation and development as state forestland, as defined by the department for the purposes of this section, are situated, whether acquired by gift, devise, purchase, or in any other manner, may apply, by its selectmen, to the commissioner of revenue administration on forms provided by the commissioner, annually before September 1, for the payment of an amount not exceeding the taxes for all purposes which such town might have received from taxes on such lands in such year had such lands been taxable. In the event that the amount appropriated in any biennium shall be insufficient for the purposes under this section, then the towns entitled to benefits under this section shall be reimbursed proportionately, unless otherwise subsequently ordered by the legislature.

39 Special Transition Rules. The following special transition rules shall apply to the implementation of the uniform education property tax established by sections 4-41 of this act in the first fiscal year following enactment:

I. "Total equalized value" as defined in RSA 21-J:3, XIII shall be based upon the amounts reported for the 1997 tax year as determined by the commissioner of revenue administration pursuant to RSA 21-J:3, XIII.

II. For the school year 1999/2000, the adequate education grant determined in RSA 198:41 shall be distributed to each municipality’s school district or districts from the education trust fund in 4 payments as follows:

(a) On July 1, 1999, and September 1, 1999, 1/8 the total adequate education grant;

(b) On January 1, 2000, and April 1, 2000, 3/8 the total adequate education grant. The commissioner of revenue administration shall certify the amount of each grant to the state treasurer and direct the payment thereof to the municipality’s school district or districts. When a payment of a grant is made to a school district, the municipality on whose behalf the payment is made, shall receive notification from the state treasurer of the amount of the payment made to its school district or districts..

III. Notwithstanding any other provision of law, the commissioner of revenue administration, for the April 1, 1999 tax year, shall issue the warrants required by RSA 76:8 on or before 30 days after the effective date of this act.

IV. Notwithstanding any other provision of law, the commissioner of revenue administration shall determine the amount of the adequate education grant for each municipality pursuant to RSA 198:41 for the 1999/2000 school year on or before 30 days after the effective date of this act.

V. For the property tax year ending March 31, 2000, municipalities which have adopted semi-annual collection of taxes shall assess the semi-annual property taxes in accordance with the provisions of RSA 76:15-a.

VI. For the property tax ending March 31, 2000, notwithstanding the provisions of RSA 76:11-a, I, the governing body of any municipality may choose to combine the local and state education property tax rates on the tax bill.

VII. Notwithstanding the provisions of RSA 80:52-a, any overpayment of property tax resulting from the implementation of this act for the tax year ending March 31, 2000 may, at the option of the governing body, be refunded to the property owner or carried forward as a credit toward the amount of taxes assessed against said property for the tax year ending March 31, 2001. Any amounts carried forward shall accrue interest at the rate prescribed in RSA 76:17-a.

VIII. For the school year ending June 30, 2000, adequate education grant moneys received by a school district pursuant to RSA 198:42 shall not be considered unanticipated funds under RSA 198:20-b. School districts may appropriate additional sums for the school year ending June 30, 2000 in accordance with the provisions of 1999, 2.

40 Severability. If any provision of this uniform education property tax enacted in sections 4-41 of this act or the application thereof to any person or circumstance is deemed invalid, the invalidity does not affect the other provisions or applications of this act which can be given effect without the invalid provisions or applications and to this end the provisions of this act are severable.

41 Repeal. The following are repealed:

I. RSA 78:20, relative to the applicability of the tobacco tax.

II. RSA 78-B:10-a, relative to the real estate transfer questionnaire.

III. RSA 21-J:3, XXIII, relative to the commissioner of revenue administration's duty to determine local per capita income for purposes of foundation aid.

IV. RSA 21-J:13, XI, relative to the form and content of the real estate transfer questionnaire.

V. RSA 198:1-3, relative to required annual district property taxes.

VI. RSA 198:15-i - RSA 198:15-q, relative to kindergarten incentive program, kindergarten aid and alternative kindergarten programs.

VII. 1998, 389:13-14 relative to prospective amendments to district foundation aid.

42 Business Profits Tax; Rate Increased. Amend RSA 77-A:2 to read as follows:

77-A:2 Imposition of Tax. A tax is imposed at the rate of [7] 8 percent upon the taxable business profits of every business organization.

43 Business Enterprise Tax; Rate Increased; Super Majority to Increase Tax Deleted. Amend RSA 77-E:2 to read as follows:

77-E:2 Imposition of Tax. A tax is imposed at the rate of [1/4] 1/2 of one percent upon the taxable enterprise value tax base of every business enterprise. [A 2/3 majority of those present and voting of each house of the general court shall be necessary to increase the tax rate under this section.]

44 Definitions; Meals and Rooms Tax; Operator. RSA 78-A:3, IV is repealed and reenacted to read as follows:

IV. "Operator" means any person operating a hotel, charging for a taxable meal, or receiving gross rental receipts, whether as owner or proprietor or lessee, sublessee, mortgagee, licensee, or otherwise.

45 New Paragraphs; Meals and Rooms Tax; Motor Vehicle Rental; Definitions. Amend RSA 78-A:3 by inserting after paragraph XIII the following new paragraphs:

XIV. "Motor vehicle" means a self-propelled vehicle designed to transport persons or property on a public highway, including a van or jeep. The term does not include the following:

(a) A device moved only by human power;

(b) A device used exclusively on stationary rails or tracks;

(c) Road-building machinery; or

(d) A mobile office.

XV. "Rental agreement" means an agreement by the owner of a motor vehicle to provide, for not longer than 180 days, the exclusive use of that motor vehicle to another for consideration.

XVI. "Gross rental receipts" means value received or promised as consideration to the owner of a motor vehicle for rental of the vehicle, but does not include:

(a) Separately stated charges for insurance;

(b) Charges for damages to the motor vehicle occurring during the rental agreement period;

(c) Separately stated charges for motor fuel sold by the owner of the motor vehicle.

XVII. "Owner of a motor vehicle" means a person named in the certificate of title as the owner of the vehicle or a person who has the exclusive use of a motor vehicle by reason of rental and holds the vehicle for re-rental.

XVIII. "Department" means the department of revenue administration.

XIX. "Renter" means any person who, for consideration paid to another, is provided a vehicle under a rental agreement.

46 Meals and Rooms Tax; Licenses Required; Penalty. Amend RSA 78-A:4 to read as follows:

78-A:4 Licenses Required; Penalty.

I. Each operator shall register with the department the name and address of each place of business within the state where [he] it operates a hotel [or], sells taxable meals, or rents motor vehicles. The operator shall pay $5 for each registration, upon receipt of which the department shall issue a license for each place in such form as it determines, attesting that the registration has been made. The license expires on June 30 in each odd-numbered year unless sooner revoked or suspended by the department. The license shall be conspicuously posted in a public area upon the premises to which it relates.

II. No person shall engage in serving taxable meals [or], renting rooms, or renting motor vehicles without first obtaining the license required by this section. The license is nonassignable and cannot be transferred. Any person who fails to register or obtain a license as provided in this section shall be subject to the penalty provisions of RSA 21-J:39.

47 New Paragraph; Tax Imposed on Motor Vehicle Rentals. Amend RSA 78-A:6 by inserting after paragraph II the following new paragraph:

II-a. A tax of 8 percent is imposed upon the gross rental receipts of each rental.

48 Meals and Rooms Tax; Collection of Tax. Amend RSA 78-A:7, I to read as follows:

I. The operator shall either state the amount of the tax to each occupant [or], purchaser of a meal, or renter, or state that the tax is included in the price of the occupancy [or], meal or gross rental receipts received. The operator shall demand and collect the tax from the occupant [or], purchaser, or renter. The occupant [or], purchaser, or renter shall pay the tax to the operator. If the tax is included in the price of the meal [or], occupancy, or gross rental receipts received, upon request the operator shall state to the purchaser [or], occupant, or renter the amount of the tax.

49 Meals and Rooms Tax; Collection of Tax. Amend RSA 78-A:7, IV to read as follows:

IV. In lieu of keeping detailed records of taxes collected, and in lieu of payment of the taxes collected under this chapter, an operator may, in writing, elect to compute the amount of taxes due at [7] 8 percent of the total taxable rent [or], charge for meals, or gross rental receipts received by [him] it, or both, exclusive of the taxes collected on such rents [and], charges, and gross rental receipts. If this election is made, the operator may not change the method of computing taxes without the written consent of the department. Any balance of the tax remaining in possession of the operator may be retained by [him] it.

50 Tobacco Settlement Funds. Beginning with the fiscal year ending June 30, 1999, $11,000,000 of funds received each fiscal year by the state of New Hampshire as a result of the settlement in 1998 of litigation against tobacco companies shall be deposited in the education trust fund established in RSA 198:39. The governor is authorized to draw a warrant for said sums out of funds received by the state from settlement of the tobacco litigation.

51 Position Established; Appropriations.

I. To carry out the financial and educational reporting requirements of this act, there are hereby established within the department of education 6 full-time permanent positions as follows:

(a) One systems development specialist IV, labor grade 25.

(b) One audit administrator, unclassified group L.

(c) Three auditors, labor grade 23.

(d) One administrative assistant, labor grade 15.

II. The sum of $600,000 is hereby appropriated to the department of education for the biennium ending June 30, 2001, to fund the positions created in paragraph I, including salary, benefits, rent, supplies, and travel. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

III. To carry out the administrative requirements of this act, there is hereby established within the department of revenue administration 2 full-time permanent positions of systems development specialist IV, labor grade 25, and a systems development specialist III, labor grade 22.

IV. The sum of $2,700,000 for the biennium ending June 30, 2001, is hereby appropriated to the department of revenue administration to fund the costs necessary to implement this act. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

V. The sum of $100,000 for the biennium ending June 30, 2001, is hereby appropriated to the department of education to fund the costs necessary to upgrade school districts' computer systems to carry out the reporting responsibilities of this act. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

VI. The sum of $4,220,000 for the fiscal year ending June 30, 2000 is hereby appropriated from the education trust fund created under RSA 198:39 to the department of revenue administration to reimburse municipalities for the increased administrative costs necessary to carry out the financial purpose of this act in accordance with part I, article 28-a of the New Hampshire constitution. The amount to be distributed to each municipality shall be determined according to the proportion of state property tax assessed by such municipality to the total state property tax assessed. Such amount shall be distributed on or before September 30, 1999.

52 Tax Equity and Efficiency Commission.

I. As new taxes are proposed to replace the interim funding proposed in this act for funding public education in accordance with the supreme court’s Claremont II decision, it is important that a review of the tax structure and policy of the state of New Hampshire be completed to insure a fair, proportional, responsible, efficient, and uncomplicated tax structure. Therefore the general court hereby establishes a tax equity and efficiency commission to undertake a comprehensive review of all taxes currently imposed on the citizens of New Hampshire, to consider the effect of all new taxes and revenue sources proposed, and to recommend adjustments to or repeal of certain taxes which may unfairly burden certain segments of the citizenry.

II.(a) There is established a tax equity and efficiency commission. The members of the commission shall be as follows:

(1) Three house members, no more than 2 of whom shall be from the same political party, appointed by the speaker of the house.

(2) Three senators, no more than 2 of whom shall be from the same political party, appointed by the senate president.

(3) Three public members, appointed by the governor.

(4) Three members of the public, appointed by the president of the senate.

(5) Three members of the public appointed by the speaker of the house.

(6) The commissioner of the department of revenue administration, or designee.

(7) The commissioner of the department of education, or designee.

(8) The state treasurer, or designee.

(b) Committee members designated in subparagraph II(a)(4)-(8) shall be nonvoting members.

(c) Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

III. The commission shall:

(a) Review each state and local tax paid by citizens of New Hampshire, with regard to who pays each tax, its effect on certain segments of the population, its effects on the economy, jobs, family and community, and whether it duplicates other taxes.

(b) Review each tax or revenue source, including but not limited to those proposed in the 1999 and 200 legislative session, under the same criteria as required by paragraph I for review of existing taxes.

(c) Make recommendations o repealing or adjusting existing taxes, and the creation of new taxes or revenue sources to fund the state obligation.

(d) Review all state grants and revenue sharing programs to determine if any can be supported by the local tax or substituted for the school tax portion if the state absorbs the responsibility for funding public education, grades K-12.

(e) Make recommendations for a complete list of taxes or other revenue sources which establish a new tax policy for this state.

IV. The members of the commission shall elect a chairperson, vice-chairperson, and clerk from among the members. The first meeting of the commission shall be called by the first-named senate member. The first meeting of the commission shall be held within 30 days of the effective date of this section.

V. Reports. The commission shall submit interim reports of its findings and recommendations to the speaker of the house, the senate president, the house clerk, the senate clerk, the governor, and the state library on or before December 1, 1999 and April 1, 2000. The commission shall submit its final report and any recommendations for proposed legislation to the senate president, the speaker of the house, the senate clerk, the house clerk, the governor, and state library on or before December 1, 2000.

53 Appropriation. The sum of $500,000 is hereby appropriated to the tax equity and efficiency commission established in section 52 of this act for the biennium ending June 30, 2001, for purposes of paying costs associated with its study and the hiring of consultants to provide analysis of all proposed and current state revenue sources. The governor is authorized to draw a warrant for said sum out of any moneys in the treasury not otherwise appropriated.

54 Severability. If any provision of this act or the application thereof to any person or circumstance is deemed invalid, the invalidity does not affect the other provisions or applications of the act which can be given effect without the invalid provisions or applications and to this end the provisions of this act are severable.

55 Applicability. Notwithstanding the provisions of section 56 as inserted by this act, effective on June 30, 2001, the original provisions of the Revised Statutes Annotated affected by section 56 of this act shall be hereby reenacted as they were in effect on the day before this act became effective. Such reenactment shall not affect any other amendments to any statutory provisions adopted in any other act of the legislature which becomes law.

56 Repeal. Sections 2-3, 11, 18, 20, 39-40, and 42-50 of this act are hereby repealed.

57 Effective Date.

I. Sections 42-43 of this act shall take effect upon its passage, and shall apply to returns and taxes and reports due on account of taxable periods beginning on or after January 1, 1999.

II. Sections 44-49 of this act shall take effect July 1, 1999.

III. Section 34 of this act shall take effect July 1, 1999 at 12:01 a.m.

IV. Section 56 of this act shall take effect June 30, 2001.

V. The remainder of this act shall take effect upon its passage and shall apply to property taxes due for the tax year ending March 31, 2000.

1999-0943s

AMENDED ANALYSIS

I. This bill:

(a) Increases the rate of the tobacco tax by 10 cents.

(b) Establishes a uniform education property tax to provide funding for an adequate education.

(c) Increases the rate of the business profits tax and the business enterprise tax.

(d) Adds a tax on rental of motor vehicles.

(e) Designates $11,000,000 annually of tobacco settlement funds received by the state for education funding.

(f) Makes appropriations to the department of education and the department of revenue administration for the purposes of the bill.

II. This bill:

(a) Establishes an educational adequacy and education financing reform commission.

(b) Establishes a system for calculating and disbursing state grants for educational adequacy.

(c) Appropriates funds to the commission for the purposes of this bill.

(d) Provides for certain catastrophic special education payments.

III. The bill also establishes a tax equity and efficiency commission and makes an appropriation to the commission.

Senator Fernald offered a floor amendment.

Sen. Larsen, Dist. 15

Sen. Blaisdell, Dist. 10

Sen. Fernald, Dist. 11

1999-0961s

09/01

Floor Amendment to HB 112-FN-A

Amend RSA 21-J:35, I-a as inserted by section 13 of the bill by replacing it with the following:

I-a. The commissioner shall set the uniform education property tax rate at $8.00 on each $1,000 of total equalized value as determined under RSA 21-J:3, XIII, of all property in the municipality subject to taxation under RSA 76:3.

Amend RSA 76:3-a as inserted by section 19 of the bill by replacing it with the following:

76:3-a Homestead Exemption. The homestead property of qualifying taxpayers is entitled to an exemption of 25 percent of the value of such property.

Senator F. King is in opposition to the floor amendment on HB 112.

Senator McCarley moved to have HB 112, increasing the tobacco tax and imposing the tax on all types of tobacco products, laid on the table.

HB 112, increasing the tobacco tax and imposing the tax on all types of tobacco products.

The House of Representatives concurs with the Senate in its amendment to the following entitled House Bill sent down from the Senate:

HB 207-FN-A, directing the office of state planning to conduct a study of the effects of sprawl in the state and making an appropriation therefor.

Senator Trombly moved that we disperse with referral to committee, that the Rules of the Senate be so far suspended to dispense with a hearing, a committee report and advertisement in the Senate Calendar and that this bill be on second reading at the present time.

Senator Gordon is in opposition to the motion of suspending the rules.

HB 117-FN-A-L, an act establishing a uniform education property tax to provide funding for an adequate public education and making an appropriation therefor.

Senator Larsen offered a floor amendment.

Sen. Larsen, Dist. 15

Sen. Blaisdell, Dist. 10

Sen. McCarley, Dist. 6

Sen. Fernald, Dist. 11

April 22, 1999

1999-0965s

09/01

Floor Amendment to HB 117-FN-A-LOCAL

Amend the title of the bill by replacing it with the following:

Amend the bill by replacing all after the enacting clause with the following:

1 Purpose; Intent.

I. In December 1997, the New Hampshire supreme court in the Claremont II decision ruled that it is the state’s duty to define and provide all New Hampshire’s public school students with an adequate education, and further that the manner of raising revenue to pay for an adequate education be through a system of taxation that is proportional in substance and just and reasonable in application.

II. Through the passage of House Bill 1075, the general court defined an adequate education. The definition grew out of work undertaken in the early 1990’s to develop curriculum frameworks which specifically address the importance of establishing and measuring what all New Hampshire students should know and be able to do. The curriculum frameworks were developed with the widespread participation of educators, business people, government officials, community representatives, and parents. They have evolved into a critical component of providing a quality public education to New Hampshire students.

III. The New Hampshire educational improvement and assessment program ("NHEIAP") tests were developed in conjunction with the curriculum frameworks as a measure of student performance. The general court therefore finds that the NHEIAP tests are a measure of student performance and can be used to develop and implement effective methods for assessing learning and its application. The general court further finds that in determining the cost of a constitutionally adequate education, performance based outcome criteria, specifically the NHEIAP test scores, can be used to identify school districts that are delivering such a constitutionally adequate education. The NHEIAP tests are comprehensive and difficult. Students taking these tests in the third, sixth, and tenth grades are scored on 4 levels of performance: novice, basic, proficient, and advanced. The general court finds that students who score in the basic, proficient, and advanced levels on these state tests are making progress toward achieving the goals set forth in House Bill 1075.

IV. The general court recognizes the inherent imprecision, subjectivity, and difficulty in determining the cost of an adequate education. Numerous complex financial, budgetary, administrative, and educational elements must be in place in order for the state to fully meet the mandates of Claremont II. Those mandates coupled with the policy of the state recognize that an adequate public education is not a static concept removed from the demands of an evolving world. An adequate education transcends mere competence in the reading, writing and arithmetic. Such an education shall provide all students with a meaningful opportunity to acquire the knowledge and skills necessary to prepare them for successful participation in the social, economic, scientific, technological, and civic realities of society, now and in the years to come. To ensure these fundamental rights, as recognized by the court, thoughtful and deliberate planning with the involvement of many sources of expertise as well as phased-in implementation of the major elements over time is required. Concomitantly, such planning and implementation is required in order to ensure:

(a) That the educational needs of all children are met, including regular education students, students with special needs such as students with disabilities, students who are economically disadvantaged or are otherwise educationally at risk, or those who are intellectually gifted;

(b) That the needed changes are long-term in nature, truly embedded on the local and state level, gain acceptance and are both cost and educationally effective, and to those ends address underlying or systemic issues; and

(c) That compliance with all applicable federal laws occurs.

V. Under Claremont II, and as recently reaffirmed by the court in its November 1998 opinion, a funding system for a constitutionally adequate education must be put in place. This bill provides for a constitutionally adequate education that is reasonably and proportionally funded through a combination of revenue sources.

VI. However, in order to meet the aforementioned competing requirements of a long-range, carefully planned, and phased-in solution and to address the need to have an acceptable system in place, this act establishes a special commission to develop long-term plans and solutions to comprehensively and permanently meet constitutional mandates.

2 Cigarette Tax. Amend RSA 78:7 to read as follows:

78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of [37] 49 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the tobacco products in which such products usually are sold at retail. The word "package" as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.

3 Applicability. Section 2 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective on the effective date of section 2 of this act, shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J.

4 Gender Reference Change. Amend the introductory paragraph of RSA 21-J:3 to read as follows:

In addition to the powers, duties, and functions otherwise vested by law, including RSA 21-G, in the commissioner of the department of revenue administration, [he] the commissioner shall:

5 Duties of Commissioner. Amend RSA 21-J:3, XIII to read as follows:

XIII. Equalize annually by March 31 the valuation of the property in the several towns, cities, and unincorporated places in the state, including the value of property exempt pursuant to RSA 72:37, 72:37-b, 72:39-a, 72:62, 72:66, and 72:70, by adding to or deducting from the aggregate valuation of the property in towns, cities, and unincorporated places such sums as will bring such valuations to the true and market value of the property, including the equalized value of property formerly taxed pursuant to the provisions of RSA 72:7; 72:15, I, V, VII, VIII, IX, X, and XI; 72:16; 72:17; 73:26; 73:27; and 73:11 through 16 inclusive, which were relieved from taxation by the laws of 1970, 5:3; 5:8; 57:12; and 57:15, the equalized valuation of which is to be determined by the amount of revenue returned in such year in accordance with RSA 31-A, and by making such adjustments in the value of other property from which the towns, cities, and unincorporated places receive taxes or payments in lieu of taxes as may be equitable and just, so that any public taxes that may be apportioned among them shall be equal and just. In carrying out the duty to equalize the valuation of property, the commissioner shall follow the procedures set forth in RSA 21-J:9-a.

6 Duties of the Commissioner. Amend RSA 21-J:3, XV to read as follows:

XV. Establish and approve tax rates as required by law including the uniform education tax rate.

7 New Paragraph; Duties of Commissioner. Amend RSA 21-J:3 by inserting after paragraph XXIV the following new paragraph:

XXV. Petition the board of tax and land appeals to issue an order for reassessment of property pursuant to the board's powers under RSA 71-B:16-19 whenever the valuation of property for equalization purposes in a particular city, town, or unincorporated place is disproportional to the valuation for equalization purposes in other cities, towns, or unincorporated places in the state.

8 Division of Property Appraisal; Department of Revenue Administration. RSA 21-J:9 is repealed and reenacted to read as follows:

21-J:9 Division of Property Appraisal. There is established within the department the division of property appraisal, under the supervision of a classified director of property appraisal who shall be responsible for the following functions, in accordance with applicable laws:

I. Assisting and supervising municipalities and appraisers in appraisals and valuations as provided in RSA 21-J:10 and RSA 21-J:11.

II. Appraising state-owned forest and recreation land under RSA 227-H and RSA 216-A.

III. Annually determining the total equalized valuation of properties in the cities and towns and unincorporated places according to the requirements of RSA 21-J:9-a.

IV. Preparing a standard appraisal manual which may be used by assessing officials, and holding meetings throughout the state with such officials to instruct them in appraising property.

9 New Section; Equalization Procedure. Amend RSA 21-J by inserting after section 9 the following new section:

21-J:9-a Equalization Procedure. The following procedures shall apply in determining the equalization of property within the cities, towns, and unincorporated places as required by RSA 21-J:3, XIII:

I. The commissioner shall annually conduct a sales-assessment ratio study which shall include arm’s length sales or transfers of property that occurred 6 months prior to and 6 months following April 1 of the tax year for which such equalization is made.

II. In determining the arm's length sales or transfers that are included in the sales-assessment ratio study, the commissioner may use a randomly selected sample of such sales and transfers the size of which shall be determined by the total taxable parcels in the city, town, or unincorporated place.

III. If less than 2 percent of the total taxable parcels in a city, town, or unincorporated place has been transferred by an arm's length sale or transfer during the 6 months prior to and 6 months following April 1 of the tax year for which such equalization is made or the commissioner determines the sales are not representative of the property within the municipality, the commissioner may choose one or more of the following options in the order listed:

(a) Include appraisals of any of the taxable property of such city, town, or unincorporated place in the sales-assessment ratio study. Such appraisals shall be based on full and true market value pursuant to RSA 75:1 and shall be performed by department appraisers. The property to be appraised shall be selected by the commissioner.

(b) Include arm's length sales or transfers in the city, town, or unincorporated place, within 2-1/2 years preceding April 1 of the year preceding the tax year for which such equalization is made.

(c) Consider recent equalization ratio activity in adjoining cities, towns, or unincorporated places.

IV. The commissioner may use the inventory of property transfers authorized by RSA 74:18 in determining the equalized value of property and may consider such other evidence as may be available to the commissioner on or before the time the final equalized value is determined.

10 Appraisals of Property for Ad Valorem Tax Purposes. RSA 21-J:11 is repealed and reenacted to read as follows:

21-J:11 Appraisals of Property For Ad Valorem Tax Purposes.

I. Every person, firm, or corporation intending to engage in the business of making appraisals on behalf of a municipality for tax assessment purposes in this state shall notify the commissioner of that intent in writing. No person, firm, or corporation engaged in the business of making appraisals of taxable property for municipalities and taxing districts shall enter into any contract or agreement with any town, city, or other governmental division without first submitting the proposed contract or agreement to the commissioner for examination and approval and submitting to the commissioner evidence of financial responsibility and professional capability of personnel to be employed under the contract.

II. The commissioner, at no expense to the municipality, shall monitor appraisals of property and supervise appraisers as follows:

(a) Assure that appraisals comply with all applicable statutes and rules;

(b) Assure that appraisers are complying with the terms of any appraisal contract;

(c) Review the accuracy of appraisals by inspection, evaluation, and testing, in whole or in part, of data collected by the appraisers; and

(d) Report to the governing body on the progress and quality of the municipality’s appraisal process.

III. The commissioner shall adopt rules under RSA 541-A relative to the provisions required of all contracts for appraisal services and the methodology for inspection, evaluation, and testing of data for the purposes of appraisal monitoring.

11 Reports Required. Amend the introductory paragraph of RSA 21-J:34 to read as follows:

The governing body of each city, town, unincorporated [town, unorganized] place, school district, and village district, and the clerk of each county convention shall submit to the commissioner of revenue administration the following reports necessary to compute and establish the uniform education property tax rate and the tax rate for each city, town, unincorporated [town, unorganized] place, school district, village district, and county. The commissioner shall adopt rules under RSA 541-A establishing the form and content of these reports:

12 New Paragraph; Reports Required. Amend RSA 21-J:34 by inserting after paragraph XIV the following new paragraph:

XV. A report filed by the assessing officials of each city, town, and unincorporated place shall certify sales-assessment information necessary for the department to conduct the annual sales-assessment ratio study required by RSA 21-J:9-a. This report shall be filed by November 30 or 30 days after receipt from the department. Municipalities which fail to timely file the report shall pay a penalty to the state in the amount of $100 for each day the report is not timely filed.

13 New Paragraph; Setting of Tax Rates by Commissioner. Amend RSA 21-J:35 by inserting after paragraph I the following new paragraph:

I-a. The commissioner shall set the uniform education property tax rate at $8.00 on each $1,000 of total equalized value as determined under RSA 21-J:3, XIII, of all property in the municipality subject to taxation under RSA 76:3.

14 Revenue Sharing. Amend RSA 31-A:4, I to read as follows:

I. Its 1978 distribution under RSA 31-A plus its share under the equalized formula of an annual increase of 5 percent in the previous year's aggregate distribution, through the year 1981, excluding revenues derived from RSA 77-A:20. The amount of money which is removed from the formula for deposit in the education trust fund shall not affect the remaining municipal revenue sharing distribution. The same amount distributed to each municipality in fiscal year 1998, excluding the amount apportioned to the school district in the 1998 property tax calculations, shall be distributed to each municipality in fiscal year 1999 and each year thereafter until the legislature revises the formula or provides additional appropriations that will affect the distribution amount.

15 Board of Tax and Land Appeals; Authority. Amend RSA 71-B:5, II to read as follows:

II.(a) To hear and determine [any] appeals by municipalities relating to the [equalization of valuation performed] equalized valuation of property determined by the commissioner of revenue administration pursuant to RSA 21-J:3, XIII. Any [town] municipality aggrieved by [an] its equalized valuation as determined by the commissioner of revenue administration must appeal to the board in writing within 30 days of [the town's notification] notice of [the] its final equalized valuation by the commissioner. The board shall hear and make a final ruling on such appeal within 45 days of its receipt by the board. The board’s decision on such appeal shall be final pending a decision by the supreme court of any appeal by any municipality of a board’s decision. The supreme court shall give any appeal under this section priority in the court calendar.

16 New Paragraph; Order for Reassessment. Amend RSA 71-B:16, IV to read as follows:

IV. When a complaint is filed with the board alleging that all of the taxable real estate or taxable property in a taxing district should be reassessed or newly assessed for any reason, provided that such complaint must be signed by at least 50 property taxpayers or 1/3 of the property taxpayers in the taxing district, whichever is less[.]; or

V. When the commissioner of revenue administration files a petition with it pursuant to RSA 21-J:3, XXV.

17 New Section; Inventory of Property Transfers. Amend RSA 74 by inserting after section 17 the following new section:

74:18 Inventory of Property Transfers.

I. In order to properly equalize the value of property under RSA 21-J:3, XIII, an inventory of property transfers shall be filed with the department of revenue administration and with the municipality where the property is located for each transfer of real estate or interest in real estate. Each form may include the following information:

(a) The buyer and seller's names and post transaction addresses and the name and address of a contact person if the buyer or seller is a trust or corporation.

(b) A description of the exact location of the property by town, street, and the assessor’s map, lot, and block number.

(c) The acreage included in the sale.

(d) An accurate description of the property included in the sale, the neighborhood where the property is located, and the type and style of the property sold.

(e) The buyer's ownership interest in the property.

(f) The sale price, date of transfer, and the amount mortgaged.

(g) The description of the type of transfer that has taken place.

(h) The amount of personal property included in the sale price.

(i) Whether the property was previously occupied and whether the property will serve as the buyer's primary residence.

(j) The financing arrangements made to purchase the property to be answered at the option of the buyer.

(k) Whether any concessions were made in the sale.

(l) Whether the property was in current use.

(m) Whether land use taxes were considered in the sale.

(n) The buyer’s dated signature certifying that the information indicated on the form is true.

II. The inventory of property transfers required by this section shall be filed with the department of revenue administration and with the municipality where the property is located by the purchaser, grantee, assignee, or transferee, no later than 30 days from the recording of the deed at the register of deeds or transfer of real estate, whichever is later. Persons required to file the inventory of property transfers who willfully fail to file or willfully make false statements on the forms shall be guilty of a violation.

III. No deed, recording a transfer of real estate or any interest in real estate, executed before October 1, 1995, shall be required to comply with this section.

IV. Failure to comply with this section shall not be construed to cloud title.

V. Any information provided to the department or the municipality pursuant to this section shall be exempt from the right-to-know law, RSA 91-A.

18 Education Property Tax. RSA 76:3 is repealed and reenacted to read as follows:

76:3 Education Property Tax. An annual education property tax at the uniform rate calculated by the commissioner of revenue administration pursuant to the authority granted in RSA 21-J:35, I-a is hereby imposed on all persons and property taxable pursuant to RSA 72 and RSA 73, except such property exempted under RSA 76:3-a or subject to tax under RSA 82.

19 New Sections; Homestead Exemption. Amend RSA 76 by inserting after section 3 the following new sections:

76:3-a Homestead Exemption. The homestead property of qualifying taxpayers is entitled to an exemption of 25 percent of the value of such property.

76:3-b Definitions. For purposes of determining and claiming the homestead exemption in RSA 76:3-a:

I. "Assessing official" means the assessing authority of any town, city, or unincorporated place.

II. "Commissioner" means the commissioner of the department of revenue administration.

III. "Department" means the department of revenue administration.

IV. "Dwelling" means the house or habitation for a natural person or persons consisting of a structure that provides shelter from the elements and contains at minimum a space for preparation and consumption of food and for repose on a daily basis.

V. "Municipality" means a city, town, or unincorporated place.

VI. "Homestead property" means the dwelling owned by a claimant or in the case of a multi-unit dwelling, the portion of the dwelling which is used as the claimant’s principal place of residence. "Homestead property" shall not include land and buildings taxed under RSA 79-A or land and buildings or the portion of land and buildings rented or used for commercial or industrial purposes. In this paragraph, a dwelling is "owned" by a claimant if the claimant is in possession of the dwelling as a vendee under a land contract. A dwelling may be "owned" by more than one person if they hold the property as joint tenants or tenants in common, in which case their homestead exemption shall be apportioned among them on their claim forms.

VII. "Qualifying taxpayer" means a person who on April 1 owns homestead property subject to the tax imposed under RSA 76:3, and who by June 30, 1999, or in subsequent years by May 1 of the tax year for which the claim is made, submits a claim to the selectmen or assessing officials on a form prescribed by the commissioner and signed by the claimant under the pains and penalties of perjury. Claims filed after June 30, 1999, or May 1 of subsequent years shall not be considered timely for the current tax year, but shall be considered filed for the following tax year..

76:3-c Acceptance or Denial of Claims; Grounds for Denial; Procedure; Claims Continuous.

I. Upon receipt of a claim for a homestead exemption, the selectmen or assessing officials shall review the claim and accept or deny the claim by August 1 of the year for which the claim is timely.

II. The only grounds for the selectmen or assessing officials to deny a claim are:

(a) If the claim form is incomplete or incorrectly filled out; or

(b) If a majority of the selectmen or assessing officials have personal knowledge that the property on which the claim is made is not homestead property owned by the claimant.

III. If they deny a claim, the selectmen or assessing officials shall send written notice to the claimant on a form prescribed by the commissioner and provided to each municipality. Failure of the selectmen or assessing officials to respond by August 1 shall constitute acceptance of the claim. The selectmen or assessing officials will be deemed to have responded by August 1 if, on or before that date, the claimant has received the written notice from the selectmen or assessing officials, or if the selectmen or assessing officials have sent, on or before August 1, the written notice to the claimant by first-class mail, postage prepaid, at the mailing address provided by the claimant on the claim form. If August 1 is a Saturday, Sunday, or legal holiday, then the selectmen’s or assessing official’s denials must be delivered or mailed on or before the day that is not a Saturday, Sunday, or legal holiday.

IV. All claims accepted by the selectmen or assessing officials shall be sent to the department by August 20. The commissioner may prescribe a form for the municipalities to use for this purpose.

V. Accepted claims shall continue from year to year without necessity for refiling unless there is a change in ownership or use of the property. A change in ownership requires the filing of a new claim, but the homestead treatment continues as long as the new owner uses the property as homestead property.

76:3-d Mixed Use; Property Owned by Multiple Claimants; Manufactured Housing.

I. The following shall apply to the determination of the amount of property value exempted relative to a homestead which is part of a single tax parcel upon which is located other dwelling units not owned or occupied by the taxpayer or other significant non-homestead property:

(a) If the tax parcel includes property used for business or other nonresidential use, the exempt homestead amount shall include in addition to the actual homestead the lesser of 1,000 square feet of floor area of such non-homestead property or $25,000 of equalized assessed valuation, except that family owned and operated farms which are not owned by a business entity or held in the name of a non-natural person shall be eligible for the full homestead exemption on all property not assessed under RSA 79-A.

(b) If the tax parcel includes other dwellings or dwelling units, the value of the homestead exemption relative to the claimed homestead shall be determined by the assessing official as follows:

(1) Divide the value of the tax parcel by the number of dwelling units; or

(2) If the square footage of each dwelling unit is known, multiply the value of the tax parcel by a fraction consisting of the square footage of the claimed homestead divided by the total square footage of all dwelling units in the parcel; or

(c) In lieu of the methods of determining the amount of homestead exemption in subparagraph (a) or (b), a taxpayer may present competent evidence of a greater proportion of exempt value to the assessing officials. In such instance the taxpayer bears the burden of proving the claimed exemption by the preponderance of the evidence.

II. If homestead property is owned by more than one claimant, the claimants shall apportion their claims so that the total of their claims does not exceed the exemption that could be claimed under RSA 76:3-a if the property were owned by one claimant.

III. Manufactured housing as defined in RSA 674:31, qualifying as homestead property and sited on land not owned by the claimant, shall be eligible for the homestead exemption based on the value of such manufactured housing without the land.

76:3-e Partial Year Homestead Exemption. If a taxpayer purchases a homestead after April 1 for which no homestead exemption was claimed by the previous owner, the taxpayer may apply to the department for a refund of statewide education property tax previously paid on the homestead, but for which no application was made. The amount of such refund shall be apportioned according to the number of days in the tax year the taxpayer owned and occupied the homestead. Claims by taxpayers purchasing homestead property shall be filed with the inventory of property transfer required to be filed with the municipality pursuant to RSA 74:18. The selectmen or assessing officials shall, within 30 days of filing of the referral claim, accept or deny it and, if accepted, notify the department. The department shall certify the amount of such refund to the state treasurer for payment from the education trust fund created by RSA 198:39.

76:3-f Forms. Forms necessary for the implementation of the homestead exemption in RSA 76:3-a shall be prescribed by the commissioner and provided to each municipality. The provisions of RSA 541-A shall not apply to the development of such forms.

76:3-g False Homestead Claims. Any person who files a false homestead claim may, in addition to paying the full tax owned plus charges and interest, be subject to a penalty of 2 times the difference between the tax paid on the property and the tax owed.

20 What Taxes Assessed. Amend RSA 76:5 to read as follows:

76:5 What Taxes Assessed. The selectmen shall seasonably assess all state and county taxes for which they have the warrants of the [state] commissioner of revenue administration and county treasurers respectively; all taxes duly voted in their towns; and all school[, schoolhouse,] and village district taxes authorized by law or by vote of any school or village district duly certified to them; and all sums required to be assessed by RSA 33.

21 Commissioner’s Warrant. RSA 76:8 is repealed and reenacted to read as follows:

76:8 Commissioner’s Warrant.

I. The commissioner of revenue administration shall annually calculate the proportion of the education property tax to be raised by each municipality by multiplying the uniform education property tax rate by the total equalized value of all property in the municipality as determined under RSA 21-J:3, XIII.

II. The commissioner shall issue a warrant under the commissioner’s hand and official seal for the amount computed in paragraph I to the selectmen or assessors of each municipality at the time of the setting of the tax rate directing them to assess such sum and pay it to the municipality for the use of the school district or districts and, if there is an excess education tax payment due under RSA 198:47, I, directing them to assess the amount of that excess education tax payment and pay it to the department of revenue administration for deposit in the education trust fund. The commissioner shall also issue a warrant under the commissioner’s hand and official seal for such sums and at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality.

III. Municipalities are authorized to assess local property taxes necessary to fund school district appropriations not funded by the education property tax, by distributions from the education trust fund under RSA 198:39, or by other revenue sources.

22 Commissioner’s Report. RSA 76:9 is repealed and reenacted to read as follows:

76:9 Commissioner’s Report. The commissioner of revenue administration shall report to the governor, the speaker of the house of representatives, the president of the senate, and the commissioner of education each year on or before October 1, a statement of the education property tax warrants to be issued for the tax year commencing April 1 of the succeeding year.

23 Information Required. Amend RSA 76:11-a, I to read as follows:

I. The tax bill which is sent to every person taxed, as provided in RSA 76:11, shall show the rate for municipal, [school] local education, state education, and county taxes separately, the assessed valuation of all lands and buildings for which said person is being taxed, and the right to apply in writing to the selectmen or assessors for an abatement of the tax assessed as provided under RSA 76:16. The department of revenue administration shall compute for each town and city the rates which are to appear on the tax bills and shall furnish the required information to the appropriate town or city.

24 Extent. Amend RSA 85:1 to read as follows:

85:1 Who May Issue. The state treasurer or the commissioner of revenue administration, and each county and town treasurer, may issue extents under their hands and seals respectively, in cases authorized by law, and such extents shall be deemed to be executions against the person and property.

25 New Subdivisions; State Aid for Educational Adequacy; Education Trust Fund; Excess Education Property Tax Payment; Commission. Amend RSA 198 by inserting after section 37 the following new subdivisions:

State Aid for Educational Adequacy; Education Trust Fund

198:38 Definitions. In this subdivision:

I. "Municipality" means a city, town, or unincorporated place.

II. "School district" means school district as defined in RSA 194:1 or RSA 195:1.

III. "Elementary school" means a school with any of the grades kindergarten through 8.

IV. "High school" means a school with any of the grades 9 through 12.

V. "Average base per pupil cost of an elementary school pupil" means the amount as determined in accordance with RSA 198:40.

VI. "Weighted pupils" means resident pupils weighted as follows:

(a) Every pupil, including kindergarten pupils, 1.0.

(b) A high school pupil, an additional weight of 0.2.

(c) An educationally disabled child, an additional weight of 1.0.

(d) An elementary pupil who is eligible to receive a free or reduced-price meal shall receive an additional weight as follows:

(1) If the pupil is in a district in which less than 12 percent of the elementary pupils are eligible to receive a free or reduced-price meal, and additional weight of zero.

(2) If the pupil is in a district where at least 12 percent but less than 24 percent of the elementary pupils are eligible to receive a free or reduced-price meal, an additional weight of 0.5.

(3) If the pupil is in a district in which at least 24 percent of the elementary pupils are eligible to receive a free or reduced-price meal, an additional weight of 1.0.

VII. "Educationally disabled child" means an educationally disabled child as defined in RSA 186-C:2, I.

VIII. "Consumer price index" means the consumer price index for all items for urban consumers for the Northeast published by the United States Department of Labor.

IX. "Average daily membership in attendance" means average daily membership in attendance as defined in RSA 189:1-d, III.

X. "Average daily membership in residence" and "resident pupils" mean the average daily membership in residence as defined in RSA 189:1-d, IV.

XI. "Transportation costs" means the costs of transporting pupils to and from school and other school activities reported by school districts on the MS-25 form.

198:39 Education Trust Fund Created and Invested.

I. The state treasurer shall establish an education trust fund in the treasury. Moneys in such fund shall not be used for any purpose other than to distribute adequate education grants to municipalities’ school districts pursuant to RSA 198:42 and make catastrophic aid payments under RSA 186-C:18, III(d). The state treasurer shall deposit into this fund immediately upon receipt:

(a) The full amount of excess property tax payments from the department of revenue administration pursuant to RSA 198:47.

(b) All moneys due the fund in accordance with RSA 284:21-j.

(c) The school portion of any revenue sharing funds distributed pursuant to RSA 31-A which were apportioned to school districts in the property tax rate calculations in 1998.

(d) Tobacco settlement funds in the amount of $30,000,000 annually.

(e) Any other moneys appropriated from the general fund.

II. The education trust fund shall be nonlapsing. The state treasurer shall invest that part of the fund which is not needed for immediate distribution in short-term interest-bearing investments. The income from these investments shall be returned to the fund.

198:40 Methodology for Calculating the Cost of an Adequate Education.

I. For the fiscal year beginning July 1, 1999, the average base per pupil cost of an elementary school pupil shall be $3,303.

II. For the fiscal year beginning July 1, 2000, the average base per pupil cost of an elementary school pupil shall be $3,468.

III. For the biennium beginning July 1, 2001, and every biennium thereafter, the average base per pupil cost of an elementary school pupil shall be established by the general court.

IV. If the general court makes no change in the average base per pupil cost of an elementary school pupil, the average base per pupil cost for the previous fiscal year shall be adjusted by the change in the consumer price index between the January immediately preceding the beginning of the fiscal year of distribution and the second preceding January. In making the calculations required by this subdivision in subsequent fiscal years, the department of education shall use the average daily membership in residence, special education costs, and transportation costs for the second preceding school year and the district percentage of pupils eligible to receive a free or reduced-priced meal reported to the department of education on October 1 of the second preceding calendar year.

V. The weighted average daily membership in residence for each district shall be calculated by combining the district’s elementary average daily membership in residence with its weighted high school average daily membership in residence, the district’s average daily membership in residence resulting from educationally disabled children, and the district’s additional average daily membership in residence resulting from elementary pupils eligible to receive a free or reduced-priced meal. The statewide weighted average daily membership in residence of pupils shall be calculated by combining the weighted average daily membership in residence of each school district in the state.

VI. For each fiscal year, the statewide cost of an adequate education for all pupils shall be calculated by multiplying the average base per pupil cost of an adequate education by the statewide weighted average daily membership in residence of pupils and then adding 70 percent of total statewide district transportation costs.

198:41 Determination of Adequate Education Grants.

I. Except for municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for the municipality as follows:

(a) Multiply the average base per pupil cost of an adequate education by the weighted average daily membership in residence for the municipality;

(b) Add to the product of subparagraph (a), 70 percent of the municipality’s apportioned transportation cost;

(c) Subtract from the sum of subparagraph (b) the amount of the education property tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year.

II. For municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of revenue administration shall determine the amount of the adequate education grant for each municipality as the lesser of the following 2 calculations:

(a) The amount calculated in accordance with paragraph I of this section; or

(b) The total amount paid for items of current education expense as determined by the department of education minus the amount of the education property tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year.

198:42 Distribution Schedule of Adequate Education Grant.

I. The adequate education grant determined in RSA 198:41 shall be distributed to each municipality’s school district or districts from the education trust fund in 4 payments of 20 percent on July 1, 20 percent on September 1, 30 percent on January 1, and 30 percent on April 1 of each school year.

II. For the fiscal year ending June 30, 2000, an amount calculated by the commissioner of education necessary to fund the grants under RSA 198:41 is hereby appropriated from the education trust fund created under RSA 198:39 to the department of education.

III. The general court is constitutionally obligated to fund the cost of an adequate education, and there are hereby appropriated the funds necessary to make the payments required under RSA 198:41. The governor is authorized to draw a warrant for such sums out of any money in the treasury not otherwise appropriated.

IV. The department of education shall certify the amount of each grant to the state treasurer and direct the payment thereof to the school district. When a payment of a grant is made to a school district, the municipality on whose behalf the payment is made, shall receive notification from the state treasurer of the amount of the payment made to its school district or districts.

198:43 Additional Education Expenditures. School districts are authorized to develop educational programs beyond those required for an adequate education and to raise and appropriate amounts necessary for such programs.

198:44 Use of Funds for Education Purposes.

I. Annually, each school district shall appropriate an amount that equals or exceeds the amount necessary to fund an adequate education for the pupils in that district. Notwithstanding any other provision of law, in the event a school district fails to appropriate at least the required amount, that amount shall be assessed and collected by the municipality, appropriated to the school district, and expended for educational purposes in accordance with paragraph IV without a vote of the school district.

II. On or before June 30 of each year, the individual with fiscal responsibility in each municipality shall submit a statement to the commissioner of revenue administration and the commissioner of education that the funds collected by the municipality pursuant to RSA 76:8 have been paid over to the school district or districts to be expended for educational purposes in accordance with paragraph IV. The statement shall include the following: "I certify, under the pains and penalties of perjury, that all of the information contained in this document is true, accurate, and complete."

III. If a municipality uses any part of the funds collected pursuant to RSA 76:8 for non-educational purposes, the municipality shall pay to the school district an amount equal to the portion of funds used for such non-educational purposes.

IV. The funds collected by municipalities pursuant to RSA 76:8 and the funds received from the state pursuant to RSA 198:42 shall be appropriated by a school district only for current education expenses or transfers to reserves or trusts funds and shall not be used for any other purpose.

V. On or before June 30 of each year, the individual with fiscal responsibility in each school district shall submit a statement to the commissioner of revenue administration and the commissioner of education that an amount of money that equals the amount necessary to fund an adequate education for the pupils in that district was used in accordance with paragraph IV. The statement shall include the following: "I certify, under the pains and penalties of perjury, that all of the information contained in this document is true, accurate, and complete."

198:45 Duties of the Department of Education and the Board of Education.

I. The department of education shall, on or before September 30 of each year, collect from the school districts final data concerning all aspects of student attendance for the school year ending June 30 of that year necessary to establish the average daily membership, average daily membership in residence, and weighted average daily membership in residence, including the municipality of residence for each pupil for that year. The department of education shall submit a report by December 31 to the speaker of the house of representatives and the senate president to be used for purposes of determination by the legislature of the appropriation to the education trust fund. A copy of such report shall, at the same time, be given to the department of revenue administration.

II. The board of education shall adopt rules pursuant to RSA 541-A necessary to the proper administration of this subdivision.

198:46 Submission of Data by School Districts. Each school district shall submit all attendance information required by the department of education under this subdivision on or before September 30 of each year.

Excess Education Property Tax Payment

198:47 Excess Education Property Tax Payment.

I. Except as provided in paragraph IV and RSA 198:48, VI, municipalities for which the education property tax exceeds the amount necessary to fund an adequate education determined by RSA 198:40 shall collect and remit such excess amount to the department of revenue administration on or before March 15 of the tax year in which the excess occurs.

II. The amount of such excess to be remitted shall not include any income derived from the investment of funds by the town treasurer under RSA 41:29. Any funds remaining after full payment of the excess tax required in paragraph I shall become available for unrestricted use by the municipality.

III. The commissioner of the department of revenue administration shall collect from the selectmen the excess tax and pay the excess tax over to the state treasurer for deposit in the education trust fund established by RSA 198:39.

IV. The commissioner of the department of revenue administration shall calculate the excess amount owed by each municipality pursuant to paragraph I for the tax year 1999. Notwithstanding any other provision of this section, the warrant issued pursuant to RSA 76:8 shall direct municipalities to only collect and remit to the department of revenue administration not more than the following percentages of excess amounts during the tax years 1999-2001:

(a) In tax year 1999, 25 percent;

(b) In tax year 2000, 50 percent; and

(c) In tax year 2001, 75 percent.

198:48 Form. The commissioner shall approve and provide forms relative to the reporting and remitting of excess education property tax by the municipalities.

Adequate Education and

Education Financing Reform Commission

198:49 Adequate Education and Education Financing Reform Commission Established; Membership.

I. There is hereby established an adequate education and education financing reform commission which shall be composed of 19 members as follows:

(a) The chairpersons of the house education and house finance committees, appointed by the speaker of the house.

(b) The chairpersons of the senate education and senate finance committees, appointed by the president of the senate.

(c) Four members appointed by the governor, one of whom shall be an elementary or secondary special education teacher, one of whom shall be a primary teacher who does not teach special education, and one of whom shall be a member of the business community.

(d) The chancellor of the university system of New Hampshire or designee.

(e) The commissioner of the regional community-technical college system.

(f) One member from the state board of education, appointed by the chairperson of the state board of education.

(g) One member from a special education advocacy organization, appointed by such organization; and

(h) Seven members who shall be agreed to and jointly appointed by the governor, the president of the senate, and the speaker of the house consisting of the following:

(1) One local school board member, recommended by the New Hampshire School Boards Association.

(2) One school administrator, recommended by the New Hampshire School Administrators Association.

(3) One special education administrator at the elementary or secondary school level, recommended by the New Hampshire Association of Special Education Administrators.

(4) Two parents of school-age children, one of whom shall be the parent of a child with an educational disability.

(5) One member from the business community, who shall be associated with the School to Work Initiative.

(6) One school business official, recommended by the New Hampshire Association of School Business Officials.

II. The commission shall elect a chairperson from among its membership and shall form subcommittees necessary to perform its duties. The chairperson shall determine the frequency of meetings at its first meeting.

III. The members of the commission shall serve without compensation, provided that legislative members of the commission shall receive mileage at the legislative rate while attending to the duties of the commission, and provided that the parent members of the commission shall be reimbursed for travel expenses associated with their duties on the commission.

IV. In order to ensure that all students are provided an adequate education, the duties of the commission shall be as follows:

(a) Determine and recommend the costs of an adequate education for all students in New Hampshire by determining and calculating adjustments for individual school districts based on yearly inflation, cost of living variances, diseconomies of scale, transportation variability, demographics, including for school districts with a disproportionate number of students who are economically disadvantaged or have educational disabilities, and such other factors as deemed relevant.

(b) Determine and recommend the amount of state aid, including building aid, to be distributed to cities and towns based upon the cost of an adequate education as set forth in subparagraph (a) and the method for distributing the state aid.

(c) Recommend changes in policy and procedure in the areas of educational improvement and accountability.

(d) Recommend interim and permanent processes to ensure adequate planning and implementation at the local and state level of special education and educationally related services, including planning for and development, on an interagency basis, of local school based options for pupils who have been placed in alternative or separate schools who could be placed in appropriate less restrictive options if available.

V. The commission shall be divided into the following policy subcommittees: adequacy and cost, educational improvement and accountability, and special education funding.

VI. The commission shall report its findings and recommendations no later than December 1, 2000. The report shall include, for each recommendation, proposed implementation schedules with timelines, specific steps, agencies and persons responsible, and resources needed. Where feasible, all plans, measures and initiatives shall be proposed as legislation or regulation so that they will have the force of law. All recommendations and plans shall be designed to be fully implemented no later than September 1, 2004.

VII. The department of justice, department of revenue administration, department of education, and department of health and human services shall provide the commission with assistance.

26 Appropriation. The sum of $150,000 for the fiscal year ending June 30, 2000, is hereby appropriated for the purposes of the commission established in RSA 198:49 as inserted by section 25 of this act. This sum shall be nonlapsing until June 30, 2001. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

27 New Subparagraph; Special Education; Catastrophic Aid Payments. Amend RSA 186-C:18, III by inserting after subparagraph (c) the following new subparagraph:

(d) For each fiscal year beginning with the fiscal year ending June 30, 2000, $2,000,000 shall be appropriated from the education trust fund established in RSA 198:39 to the department of education to assist those school districts which, under rules adopted by the state board of education, qualify for emergency assistance in meeting special education catastrophic costs pursuant to this section.

28 Reference Added. Amend RSA 189:1-d, IV to read as follows:

IV. "Average daily membership in residence" means the average daily membership of students enrolled in public schools within the district or students whose tuition is being paid by the district, pursuant to RSA 186-C:10, to another approved public or private school for a given school district in a given school year.

29 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:7, I to read as follows:

I. If a cooperative school district was organized prior to July 1, 1963, during the first 5 years after the formation of a cooperative school district each preexisting district shall pay its share of all capital outlay costs and all operational costs in excess of the amount determined necessary to provide an adequate education under RSA 198:40 in accordance with either one of the following formulas as determined by a majority vote of the cooperative district meeting:

30 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:14, I(b) to read as follow:

(b) The commissioner of revenue administration shall examine such certificates and delete any appropriations which appear not made in accordance with the law, and adjust any sum, in accordance with RSA 21-J:35, which may be used as a setoff against the amount appropriated when it appears to the commissioner of revenue administration such adjustment is in the best public interest. The commissioner of revenue administration shall apply the total amount of all adequate education grants received pursuant to RSA 198:42.

31 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:18, III(e) to read as follows:

(e) The method of apportioning [the] all operating expenses in excess of the amount determined necessary to provide an adequate education under RSA 198:40, of the cooperative school district among the several preexisting districts and the time and manner of payment of such shares. Home education pupils who do not receive services from the cooperative school district, except an evaluation pursuant to RSA 193-A:6, II, shall not be included in the average daily membership relative to apportionment formulas.

32 Cooperative School Districts; Adequate Education Grants. Amend RSA 195:18, IX to read as follows:

IX. The organization meeting of a cooperative school district shall be called to order by the chairperson of the cooperative school district planning board, or by the clerk-treasurer thereof, who shall serve as temporary chairperson for the first order of business which shall be the election of a moderator and of a temporary clerk, by ballot, who shall be qualified voters of the district. From and after the issuance of the certificate of formation by the board to the date of operating responsibility of the cooperative school district, such district shall have all the authority and powers of a regular school district for the purposes of incurring indebtedness, for the construction of school facilities and for such other functions as are necessary to obtain proper facilities for a complete program of education. When necessary in such interim, the school board of the cooperative school district is authorized to prepare a budget and call a special meeting of the voters of the district, which meeting shall have the same authority as an annual meeting, for the purpose of adopting the budget, making necessary appropriations, and borrowing money. Whenever the organization meeting is held on or before April 20 in any calendar year, no annual meeting need be held in such calendar year. Sums of money raised and appropriated at the organization meeting or any interim meeting prior to the first annual meeting shall be forthwith certified to the commissioner of revenue administration and the state department of education upon blanks prescribed and provided by the commissioner of revenue administration for the purpose, together with a certificate of estimated revenues, so far as known, and such other information as the commissioner of revenue administration may require. The commissioner of revenue administration shall examine such certificates and delete any appropriations which appear not made in accordance with the law, and adjust any sum which may be used as a setoff against the amount appropriated when it appears to the commissioner such adjustment is in the best public interest. The commissioner of revenue administration shall apply the total amount of all adequate education grants received pursuant to RSA 198:40 as a setoff against the amount appropriated. The commissioner of revenue administration shall certify to the state department of education the total amount of taxes to be raised for said cooperative school district and the state department of education shall determine the proportional share of said taxes to be borne by each preexisting school district and notify the commissioner of revenue administration of its determination. Upon certification by the commissioner of revenue administration the selectmen of each town shall seasonably assess the taxes as provided by law. The selectmen shall pay over to the treasurer of the cooperative district such portion of the sums so raised as may reasonably be required according to a schedule of payments needed for the year as prepared by the treasurer and approved by the cooperative school board, but no such payment shall be greater in percentage to the total sum to be raised by one local district than that of any other local district comprising such cooperative school district.

33 Reference Change. Amend RSA 193:1, I(c) to read as follows:

(c) The relevant school district superintendent has excused a child from attendance because the child is physically or mentally unable to attend school, or has been temporarily excused upon the request of the parent for purposes agreed upon by the school authorities and the parent. Such excused absences shall not be permitted if they cause a serious adverse effect upon the student's educational progress. Students excused for such temporary absences may be claimed as full-time pupils for purposes of calculating state aid under RSA 186-C:18 and [RSA 198:27-37] adequate education grants under RSA 198:41.

34 Reimbursement Anticipation Notes; Version Effective Until July 1, 1999. Amend RSA 198:20-d to read as follows:

198:20-d Reimbursement Anticipation Notes. Notwithstanding any other provision of law to the contrary, a school district may incur debt in anticipation of reimbursement under RSA 186-C:18 and under RSA 198:42. The governing body, after receiving authorization for borrowing from the legislative body, may elect to recognize the proceeds of the borrowing as revenue for property tax rate setting purposes by providing written notification, prior to September 1, to the commissioner of the department of revenue administration stating the specific amount of borrowing to be recognized as revenue.

35 Reimbursement Anticipation Notes; July 1, 1999 Version. Amend RSA 198:20-d to read as follows:

198:20-d Reimbursement Anticipation Notes. Notwithstanding any other provision of law to the contrary, a school district may incur debt in anticipation of reimbursement under RSA 186-C:18 and under RSA 198:42. The governing body, after notice and public hearing, may elect to borrow such funds and to recognize the proceeds of the borrowing as revenue for property tax rate setting purposes by providing written notification, prior to September 1, to the commissioner of the department of revenue administration stating the specific amount of borrowing to be recognized as revenue. Any borrowing under this section shall be exempt from the provisions of RSA 33, relative to debt limits.

36 Sweepstakes. RSA 284:21-j is repealed and reenacted to read as follows:

284:21-j Establishment. The state treasurer shall credit all moneys received from the sweepstakes commission, and interest received on such moneys, to a special fund from which the treasurer shall pay all expenses of the commission incident to the administration of this subdivision and RSA 287-E. Any balance left in such fund after such expenses are paid shall be deposited in the education trust fund established under RSA 198:39.

37 Transition. As of July 1, 1999, all funds, from any source derived, which would be distributed as foundation aid shall be deposited in the education trust fund under RSA 198:39, including the $62,000,000 appropriated under 1998, 389:16, II.

38 Removing Reference to Foundation Aid. Amend RSA 198:21, V to read as follows:

V. No pupil counted by any school district for the purpose of calculating the amount of a grant to be paid pursuant to this section shall for the same school year by the same district be [included in average daily membership for the purposes of foundation aid or] counted for the purposes of grants pursuant to RSA 198:22.

39 Removing Reference to Foundation Aid. Amend RSA 198:22, V to read as follows:

V. No pupil counted by any school for the purpose of calculating the amount of a grant to be paid pursuant to this section shall for the same school year by the same district be [included in average daily membership for the purposes of foundation aid or] counted for the purpose of grants pursuant to RSA 198:21.

40 Payment in Lieu of Taxes. Amend RSA 227-H:17 to read as follows:

227-H:17 Payment in Lieu of Taxes. The commissioner of revenue administration shall adopt rules, pursuant to RSA 541-A, relative to forms for application to the commissioner of revenue administration for payment for lost taxes. [In any year in which no state tax is levied,] Any town in which national forest lands and land held by the state for operation and development as state forestland, as defined by the department for the purposes of this section, are situated, whether acquired by gift, devise, purchase, or in any other manner, may apply, by its selectmen, to the commissioner of revenue administration on forms provided by the commissioner, annually before September 1, for the payment of an amount not exceeding the taxes for all purposes which such town might have received from taxes on such lands in such year had such lands been taxable. In the event that the amount appropriated in any biennium shall be insufficient for the purposes under this section, then the towns entitled to benefits under this section shall be reimbursed proportionately, unless otherwise subsequently ordered by the legislature.

41 Special Transition Rules. The following special transition rules shall apply to the implementation of the uniform education property tax established by sections 4-44 of this act in the first fiscal year following enactment:

I. "Total equalized value" as defined in RSA 21-J:3, XIII shall be based upon the amounts reported for the 1997 tax year as determined by the commissioner of revenue administration pursuant to RSA 21-J:3, XIII.

II. For the school year 1999/2000, the adequate education grant determined in RSA 198:41 shall be distributed to each municipality’s school district or districts from the education trust fund in 4 payments as follows:

(a) On July 1, 1999, and September 1, 1999, 1/8 the total adequate education grant;

(b) On January 1, 2000, and April 1, 2000, 3/8 the total adequate education grant. The commissioner of revenue administration shall certify the amount of each grant to the state treasurer and direct the payment thereof to the municipality’s school district or districts. When a payment of a grant is made to a school district, the municipality on whose behalf the payment is made, shall receive notification from the state treasurer of the amount of the payment made to its school district or districts..

III. Notwithstanding any other provision of law, the commissioner of revenue administration, for the April 1, 1999 tax year, shall issue the warrants required by RSA 76:8 on or before 30 days after the effective date of this act.

IV. Notwithstanding any other provision of law, the commissioner of revenue administration shall determine the amount of the adequate education grant for each municipality pursuant to RSA 198:41 for the 1999/2000 school year on or before 30 days after the effective date of this act.

V. For the property tax year ending March 31, 2000, municipalities which have adopted semi-annual collection of taxes shall assess the semi-annual property taxes in accordance with the provisions of RSA 76:15-a.

VI. For the property tax ending March 31, 2000, notwithstanding the provisions of RSA 76:11-a, I, the governing body of any municipality may choose to combine the local and state education property tax rates on the tax bill.

VII. Notwithstanding the provisions of RSA 80:52-a, any overpayment of property tax resulting from the implementation of this act for the tax year ending March 31, 2000 may, at the option of the governing body, be refunded to the property owner or carried forward as a credit toward the amount of taxes assessed against said property for the tax year ending March 31, 2001. Any amounts carried forward shall accrue interest at the rate prescribed in RSA 76:17-a.

VIII. For the school year ending June 30, 2000, adequate education grant moneys received by a school district pursuant to RSA 198:42 shall not be considered unanticipated funds under RSA 198:20-b. School districts may appropriate additional sums for the school year ending June 30, 2000 in accordance with the provisions of 1999, 2.

42 Special Provision for Foundation Aid. Notwithstanding the repeal pursuant to section 44 of this act of RSA 198:27-37, relative to foundation aid and alternative foundation aid, the payment of foundation aid to be made in April 1999 pursuant to RSA 198:31 before such section is repealed, shall be calculated by the department of education and distributed to the recipients as if such repeal had not occurred.

43 Severability. If any provision of this uniform education property tax enacted in sections 4-44 of this act or the application thereof to any person or circumstance is deemed invalid, the invalidity does not affect the other provisions or applications of this act which can be given effect without the invalid provisions or applications and to this end the provisions of this act are severable.

44 Repeal. The following are repealed:

I. RSA 78:20, relative to the applicability of the tobacco tax.

II. RSA 78-B:10-a, relative to the real estate transfer questionnaire.

III. RSA 83-D, relative to the tax on nuclear station property.

IV. RSA 21-J:3, XXIII, relative to the commissioner of revenue administration's duty to determine local per capita income for purposes of foundation aid.

V. RSA 21-J:13, XI, relative to the form and content of the real estate transfer questionnaire.

VI. RSA 194-B:11, VIII, relative to foundation aid in relation to charter and open enrollment schools.

VII. RSA 198:1-3, relative to required annual district property taxes.

VIII. RSA 198:15-i-RSA 198:15-q, relative to kindergarten incentive program, kindergarten aid and alternative kindergarten programs.

IX. RSA 198:27-37, relative to foundation aid and alternative foundation aid.

45 Capital Gains; Interest and Dividends Tax; Who Taxable. Amend RSA 77:3 to read as follows:

77:3 Who Taxable.

I. Taxable income is that income received from interest [and], dividends, and net capital gains during the tax year prior to the assessment date by:

(a) Individuals who are inhabitants or residents of this state for any part of the taxable year whose net gains from sales of capital assets and gross interest and dividend income from all sources exceeds [$2,400] $3,000 during that taxable period.

(b) Partnerships, limited liability companies, associations, and trusts, the beneficial interest in which is not represented by transferable shares, whose net gains from sales of capital assets and gross interest and dividend income from all sources exceeds [$2,400] $3,000, during the taxable year, but not including a qualified investment company as defined in RSA 77-A:1, XXI, or a trust comprising a part of an employee benefit plan, as defined in the Employee Retirement Income Security Act of 1974, section 3.

(c) Fiduciaries deriving their appointment from a court of this state whose net gains from sales of capital assets and gross interest and dividend income from all sources exceeds [$2,400] $3,000 during the taxable year.

II. No person shall be subject to tax under RSA 77 solely due to its holding an ownership interest in a qualified investment company as defined in RSA 77-A:1, XXI.

46 New Paragraph; Sales of Capital Assets Taxable; Interest and Dividends Tax. Amend RSA 77:4 by inserting after paragraph VI the following new paragraph:

VII. Net gains from the sale or exchange of capital assets which shall be the net capital gain as determined for federal income tax purposes, after due allowance for losses and holding periods, from sales or exchanges of capital assets or assets treated as capital assets, other than notes, bonds or other obligations of the state of New Hampshire or any of the political subdivisions thereof, or its or their respective agencies or instrumentalities, or from transactions or events taxable to the taxpayer as such sales or exchanges, and being the net amount includable in the taxpayer's adjusted gross income, with respect to all such sales, exchanges, transactions, or events, under the provisions of the United States Internal Revenue Code in effect for the taxable year.

47 New Section; Deduction for Gains from Non-New Hampshire Real Property Subject to Tax In Another State. Amend RSA 77 by inserting after section 4-f the following new section:

77:4-g Deductions for Gains From Non-New Hampshire Property Subject to Tax in Another State. A taxable person shall be allowed to deduct from the sum of the income taxable under this chapter an amount equal to the net capital gains received from the sale of real property located outside of New Hampshire, but only to the extent that such net capital gains is subject to tax by another state.

48 Exemptions; Interest and Dividends Tax. Amend RSA 77:5 to read as follows:

77:5 Exemptions. Each taxpayer shall have the following exemptions:

I. Taxable income of [$2,400] $3,000.

II. An additional [$1,200] $2,000 if either or both taxpayers are 65 years of age or older on the last day of the tax year.

III. An additional [$1,200] $2,000 if either or both taxpayers are blind.

IV. An additional [$1,200] $2,000 if either or both taxpayers are disabled, unable to work, and have not yet reached their sixty-fifth birthday.

49 Reference to Capital Gains Added. Amend RSA 77:5-a to read as follows:

77:5-a Married Taxpayers; Joint Returns. A married taxpayer may claim the exemptions provided in RSA 77:5 for both self and spouse, regardless of the ownership of the income from net capital gains, interest or dividends, provided that both husband and wife file a joint return.

50 Repeal. RSA 77:4-c, relative to sale or exchange of transferable shares not taxable, is repealed.

51 Income From Trusts. Amend RSA 77:10 to read as follows:

77:10 Income from Trusts.

I. The income received by estates held by trustees, any one of whom is an inhabitant of this state, or has derived his appointment from a court of this state, shall be subject to the taxes imposed by this chapter, except that income received by estates held by trustees treated as grantor trusts under section 671 of the United States Internal Revenue Code shall be included in the return of their owners, to the extent that the persons to whom the income from the trust is payable, or for whose benefit it is accumulated, are inhabitants of this state.

II. Notwithstanding the provisions of paragraph I, the total amount of net capital gains received from the sale of real property located in New Hampshire shall be subject to the taxes imposed by this chapter.

52 Partnerships and Limited Liability Companies. Amend RSA 77:14 to read as follows:

77:14 Partnerships and Limited Liability Companies.

I. Partnerships and limited liability companies having a usual place of business in this state, any member of which is an inhabitant thereof, shall be subject to taxes imposed by this chapter. If any of the members of the partnership or limited liability company are not inhabitants of this state only so much of the income thereof as is proportionate to the aggregate interest of the partners or members who are inhabitants of this state in the profits of the partnership or limited liability company shall be taxed.

II. Notwithstanding the provisions of paragraph I, the total amount of net capital gains received from the sale of real property in New Hampshire shall be subject to the taxes imposed by this chapter.

53 Business Profits Tax; Rate Increased. Amend RSA 77-A:2 to read as follows:

77-A:2 Imposition of Tax. A tax is imposed at the rate of [7] 8 percent upon the taxable business profits of every business organization.

54 Business Enterprise Tax; Rate Increased; Super Majority to Increase Tax Deleted. Amend RSA 77-E:2 to read as follows:

77-E:2 Imposition of Tax. A tax is imposed at the rate of [1/4] 1/2 of one percent upon the taxable enterprise value tax base of every business enterprise. [A 2/3 majority of those present and voting of each house of the general court shall be necessary to increase the tax rate under this section.]

55 Definitions; Meals and Rooms Tax; Operator. RSA 78-A:3, IV is repealed and reenacted to read as follows:

IV. "Operator" means any person operating a hotel, charging for a taxable meal, or receiving gross rental receipts, whether as owner or proprietor or lessee, sublessee, mortgagee, licensee, or otherwise.

56 New Paragraphs; Meals and Rooms Tax; Motor Vehicle Rental; Definitions. Amend RSA 78-A:3 by inserting after paragraph XIII the following new paragraphs:

XIV. "Motor vehicle" means a self-propelled vehicle designed to transport persons or property on a public highway, including a van or jeep. The term does not include the following:

(a) A device moved only by human power;

(b) A device used exclusively on stationary rails or tracks;

(c) Road-building machinery; or

(d) A mobile office.

XV. "Rental agreement" means an agreement by the owner of a motor vehicle to provide, for not longer than 180 days, the exclusive use of that motor vehicle to another for consideration.

XVI. "Gross rental receipts" means value received or promised as consideration to the owner of a motor vehicle for rental of the vehicle, but does not include:

(a) Separately stated charges for insurance;

(b) Charges for damages to the motor vehicle occurring during the rental agreement period;

(c) Separately stated charges for motor fuel sold by the owner of the motor vehicle.

XVII. "Owner of a motor vehicle" means a person named in the certificate of title as the owner of the vehicle or a person who has the exclusive use of a motor vehicle by reason of rental and holds the vehicle for re-rental.

XVIII. "Department" means the department of revenue administration.

XIX. "Renter" means any person who, for consideration paid to another, is provided a vehicle under a rental agreement.

57 Meals and Rooms Tax; Licenses Required; Penalty. Amend RSA 78-A:4 to read as follows:

78-A:4 Licenses Required; Penalty.

I. Each operator shall register with the department the name and address of each place of business within the state where [he] it operates a hotel [or], sells taxable meals, or rents motor vehicles. The operator shall pay $5 for each registration, upon receipt of which the department shall issue a license for each place in such form as it determines, attesting that the registration has been made. The license expires on June 30 in each odd-numbered year unless sooner revoked or suspended by the department. The license shall be conspicuously posted in a public area upon the premises to which it relates.

II. No person shall engage in serving taxable meals [or], renting rooms, or renting motor vehicles without first obtaining the license required by this section. The license is nonassignable and cannot be transferred. Any person who fails to register or obtain a license as provided in this section shall be subject to the penalty provisions of RSA 21-J:39.

58 New Paragraph; Tax Imposed on Motor Vehicle Rentals. Amend RSA 78-A:6 by inserting after paragraph II the following new paragraph:

II-a. A tax of 8 percent is imposed upon the gross rental receipts of each rental.

59 Meals and Rooms Tax; Collection of Tax. Amend RSA 78-A:7, I to read as follows:

I. The operator shall either state the amount of the tax to each occupant [or], purchaser of a meal, or renter, or state that the tax is included in the price of the occupancy [or], meal or gross rental receipts received. The operator shall demand and collect the tax from the occupant [or], purchaser, or renter. The occupant [or], purchaser, or renter shall pay the tax to the operator. If the tax is included in the price of the meal [or], occupancy, or gross rental receipts received, upon request the operator shall state to the purchaser [or], occupant, or renter the amount of the tax.

60 Meals and Rooms Tax; Collection of Tax. Amend RSA 78-A:7, IV to read as follows:

IV. In lieu of keeping detailed records of taxes collected, and in lieu of payment of the taxes collected under this chapter, an operator may, in writing, elect to compute the amount of taxes due at [7] 8 percent of the total taxable rent [or], charge for meals, or gross rental receipts received by [him] it, or both, exclusive of the taxes collected on such rents [and], charges, and gross rental receipts. If this election is made, the operator may not change the method of computing taxes without the written consent of the department. Any balance of the tax remaining in possession of the operator may be retained by [him] it.

61 Transfer Tax; Rate. RSA 78-B:1, I(b) is repealed and reenacted to read as follows:

(b) The rate of the tax is $.75 per $100, or fractional part thereof, of the price or consideration for such sale, grant or transfer; except that where the price or consideration is $4,000 or less there shall be a minimum tax of $20. The tax imposed shall be computed to the nearest whole dollar.

62 Tobacco Settlement Funds. Beginning with the fiscal year ending June 30, 1999, $30,000,000 of funds received each fiscal year by the state of New Hampshire as a result of the settlement in 1998 of litigation against tobacco companies shall be deposited in the education trust fund established in RSA 198:39. The governor is authorized to draw a warrant for said sums out of funds received by the state from settlement of the tobacco litigation.

63 Position Established; Appropriations.

I. To carry out the financial and educational reporting requirements of this act, there are hereby established within the department of education 6 full-time permanent positions as follows:

(a) One systems development specialist IV, labor grade 25.

(b) One audit administrator, unclassified group L.

(c) Three auditors, labor grade 23.

(d) One administrative assistant, labor grade 15.

II. The sum of $600,000 is hereby appropriated to the department of education for the biennium ending June 30, 2001, to fund the positions created in paragraph I, including salary, benefits, rent, supplies, and travel. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

III. To carry out the administrative requirements of this act, there is hereby established within the department of revenue administration 2 full-time permanent positions of systems development specialist IV, labor grade 25, and a systems development specialist III, labor grade 22.

IV. The sum of $2,700,000 for the biennium ending June 30, 2001, is hereby appropriated to the department of revenue administration to fund the costs necessary to implement this act. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

V. The sum of $100,000 for the biennium ending June 30, 2001, is hereby appropriated to the department of education to fund the costs necessary to upgrade school districts' computer systems to carry out the reporting responsibilities of this act. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.

VI. The sum of $4,220,000 for the fiscal year ending June 30, 2000 is hereby appropriated from the education trust fund created under RSA 198:39 to the department of revenue administration to reimburse municipalities for the increased administrative costs necessary to carry out the financial purpose of this act in accordance with part I, article 28-a of the New Hampshire constitution. The amount to be distributed to each municipality shall be determined according to the proportion of state property tax assessed by such municipality to the total state property tax assessed. Such amount shall be distributed on or before September 30, 1999.

64 Tax Equity and Efficiency Commission.

I. As new taxes are proposed to replace the interim funding proposed in this act for funding public education in accordance with the supreme court’s Claremont II decision, it is important that a review of the tax structure and policy of the state of New Hampshire be completed to insure a fair, proportional, responsible, efficient, and uncomplicated tax structure. Therefore the general court hereby establishes a tax equity and efficiency commission to undertake a comprehensive review of all taxes currently imposed on the citizens of New Hampshire, to consider the effect of all new taxes and revenue sources proposed, and to recommend adjustments to or repeal of certain taxes which may unfairly burden certain segments of the citizenry.

II.(a) There is established a 9 member tax equity and efficiency commission. The members of the commission shall be as follows:

(1) Three house members, no more than 2 of whom shall be from the same political party, appointed by the speaker of the house.

(2) Three senators, no more than 2 of whom shall be from the same political party, appointed by the senate president.

(3) Three public members, appointed by the governor.

(4) The commissioner of the department of revenue administration, or designee..

(5) The commissioner of the department of education, or designee.

(6) The state treasurer, or designee.

(b) Committee members designated in subparagraph II(a)(4)-(6) shall be nonvoting members.

(c) Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

III. The commission shall:

(a) Review each state and local tax paid by citizens of New Hampshire, with regard to who pays each tax, its effect on certain segments of the population, its effects on the economy, jobs, family and community, and whether it duplicates other taxes.

(b) Review each tax or revenue source, including but not limited to those proposed in the 1999 and 200 legislative session, under the same criteria as required by paragraph I for review of existing taxes.

(c) Make recommendations o repealing or adjusting existing taxes, and the creation of new taxes or revenue sources to fund the state obligation.

(d) Review all state grants and revenue sharing programs to determine if any can be supported by the local tax or substituted for the school tax portion if the state absorbs the responsibility for funding public education, grades K-12.

(e) Make recommendations for a complete list of taxes or other revenue sources which establish a new tax policy for this state.

IV. The members of the commission shall elect a chairperson, vice-chairperson, and clerk from among the members. The first meeting of the commission shall be called by the first-named senate member. The first meeting of the commission shall be held within 30 days of the effective date of this section.

V. Reports. The commission shall submit interim reports of its findings and recommendations to the speaker of the house, the senate president, the house clerk, the senate clerk, the governor, and the state library on or before December 1, 1999 and April 1, 2000. The commission shall submit its final report and any recommendations for proposed legislation to the senate president, the speaker of the house, the senate clerk, the house clerk, the governor, and state library on or before December 1, 2000.

65 Appropriation. The sum of $500,000 is hereby appropriated to the tax equity and efficiency commission established in section 64 of this act for the biennium ending June 30, 2001, for purposes of paying costs associated with its study and the hiring of consultants to provide analysis of all proposed and current sate revenue sources. The governor is authorized to draw a warrant for said sum out of any moneys in the treasury not otherwise appropriated.

66 Severability. If any provision of this act or the application thereof to any person or circumstance is deemed invalid, the invalidity does not affect the other provisions or applications of the act which can be given effect without the invalid provisions or applications and to this end the provisions of this act are severable.

67 Effective Date.

I. Sections 53-54 of this act shall take effect upon its passage, and shall apply to returns and taxes and reports due on account of taxable periods beginning on or after January 1, 1999.

II. Sections 45-52 and 55-61 of this act shall take effect July 1, 1999.

III. Section 35 of this act shall take effect July 1, 1999 at 12:01 a.m.

IV. The remainder of this act shall take effect upon its passage and shall apply to property taxes due for the tax year ending March 31, 2000.

1999-0965s

AMENDED ANALYSIS

I. This bill:

(a) Increases the rate of the tobacco tax.

(b) Establishes a uniform education property tax to provide funding for an adequate education.

(c) Taxes capital gains under the interest and dividends tax.

(d) Increases the rate of the business profits tax.

(e) Adds a tax on rental of motor vehicles.

(f) Designates $30,000,000 annually of tobacco settlement funds received by the state for education funding.

(g) Makes appropriations to the department of education and the department of revenue administration for the purposes of the bill.

II. This bill:

(a) Establishes an educational adequacy and education financing reform commission.

(b) Establishes a system for calculating and disbursing state grants for educational adequacy.

(c) Appropriates funds to the commission for the purposes of this bill.

(d) Provides for certain catastrophic special education payments.

III. The bill also establishes a tax equity and efficiency commission and makes an appropriation to the commission.

Senators Gordon and F. King are in opposition to the floor amendment on HB 117.

The House of Representatives refuses to concur with the Senate in the adoption of the amendment to the following entitled House Bill sent down from the Senate:

HB 117-FN-A-L, establishing a uniform education property tax and utility property tax, increasing the business profit and real estate transfer taxes, and including other sources of revenue to provide funding for an adequate public education and making and appropriation therefor.

And requests a Committee of Conference.

The Speaker, on the part of the House of Representatives, has appointed as members of said Committee of Conference:

HB 117-FN-A-L, establishing a uniform education property tax and utility property tax, increasing the business profit and real estate transfer taxes, and including other sources of revenue to provide funding for an adequate public education and making and appropriation therefor.

Senator Hollingworth moved to accede to the House request for a committee of conference.

The President, on the part of the Senate, has appointed as said members of committee of conference:

Senator Gordon is in opposition to the motion to accede.

Senator Cohen moved that the Senate now adjourn from the early session, that the business of the late session be in order at the present time, that the bills ordered to third reading be read a third time by this resolution, all titles be the same as adopted and that they be passed at the present time; and that when we adjourn, we adjourn to the Call of the Chair.

SB 11-FN, relative to the filing fee for securities in a combined prospectus offered for sale in New Hampshire by a mutual fund.

SB 24, extending the application of certain provisions of the child protection act to all children in out-of-home placements.

SB 47-FN, relative to compensation for time lost by fish and game conservation officers for injuries received in the line of duty, and restoring certain leave time for a conservation officer injured while on duty on August 19, 1997.

HB 90, removing the prohibition on adoption and foster parenting by homosexual persons.

HB 117-FN-A-L, an act establishing a uniform education property tax to provide funding for an adequate public education and making an appropriation therefor.

SB 129-L, requiring school districts to disclose any reimbursements received to offset special education expenditures.

SB 134-FN, relative to medicaid reimbursement rates and dental care.

SB 145-FN, relative to state financial aid for state fairs, and making an appropriation therefor.

SB 170-FN-A, establishing a parents as teachers pilot program in Sullivan county and making an appropriation therefor.

SB 176-FN-A, relative to technology support for individuals and making an appropriation therefor.

SB 186-FN, relative to additional cost of living adjustments and increased minimum allowances for certain retired group II members, and relative to requiring spousal acknowledgement of a member’s election of an optional retirement allowance.

SB 187-FN-L, relative to payment of group health insurance premiums for eligible retired teachers in the New Hampshire retirement system.

SB 207-FN, relative to authorizing bonds for the construction and renovation of regional vocational education centers.

SB 216-FN, allowing veterans the right to purchase credit in the retirement system for certain service in the armed forces.

HB 229, changing the registration fee requirement of the commercial feed law.

HB 238-FN-A, allowing the production and sale of American ginseng in the state of New Hampshire and making an appropriation therefor.

HB 307, establishing a committee to study the negotiated risk agreements when patients desire to remain in a facility over the recommendations of the department of health and human services.

HB 358, relative to the term of office for members of the state board of education.

HB 418, relative to accounts and reporting dates of certain funds in the fish and game department.

HB 520, relative to an open season for chukar partridge.

Senator Johnson moved that the business of the day being completed, that the Senate now adjourn to the Call of the Chair.