Small North Country Towns In Crux Of State Tax Fight With Big Implications
June 6, 2016
Municipalities across N.H., including many in the North Country, are finding themselves at the center of a tax dispute that has put state agencies at odds and could impact how utility property in the state is assessed in the future.
At stake for small towns are millions of dollars in tax revenue.
On Wednesday, an attorney representing several of the towns, including Littleton, wrote the N.H. Supreme Court with concerns about the N.H. attorney general’s intent to file an amicus, or friend of the court, brief for what she said would be on behalf of the N.H. Department of Revenue Administration and in support of the tax abatement appeals of the two utilities against scores of municipalities.
In March, attorneys for towns being sued by Eversource Energy and the N.H. Electric Cooperative learned the attorney general’s office would be getting involved in the case that went to the N.H. Supreme Court after the two utilities appealed a July 2015 decision by the N.H. Board of Tax and Land Appeals that casts doubt on their appraisal methodology.
For their local utility property assessments, Eversource and NHEC seek to use the DRA’s 83-F formula, the unit method of valuation that sets the utilities’ share of the statewide property tax, specifically their contribution to the state education tax.
Through the DRA formula, the two utilities seek to cut their local utility assessments, and property taxes, by one-half to two-thirds.
The municipalities, however, argue the DRA method is for a different tax and does not reflect the true market value of the utility properties, but Eversource and NHEC are still trying to use it to drive their assessments below fair market value.
In its decision, the BTLA agreed with the towns and concluded the appraisals provided by NHEC and Eversource - that include the DRA utility appraisals - do “not result in credible opinions of market value.”
In her Wednesday motion to the state’s high court, Whitelaw argues the DRA should not be allowed to use a N.H. Supreme Court rule exception to file a brief in the case to respond to the BTLA decision regarding DRA procedures or address its “notion of the potential political impact the decision may have on the DRA’s own statutory responsibilities and/or the municipalities’ decisions to utilize the DRA reports for local assessing purposes.”
Whitelaw said the DRA’s apparent interest is to counter the BTLA decision “in an effort to rehabilitate itself and its employee in the eyes of the public; this is not an appropriate use of an amicus brief and is a waste of the court’s and the parties’ time and resources.”
DRA utility appraiser Scott Dickman has testified against the towns’ direct interest in the litigation, she said, and “the DRA is now deliberately inserting itself into the appeal for the stated reason that the BTLA’s decision was less than flattering of Mr. Dickman’s testimony and the DRA’s procedures.”
The DRA is statutorily charged with establishing equalization ratios used for both county and local taxation purposes, and the agency provides assessing assistance to municipalities and works with them to set their tax rates.
Whitelaw said, “The Legislature did not intend for the relationship between the municipalities and the DRA to be adversarial.”
About one-third of N.H. municipalities use the DRA’s utility valuation for local property assessments instead of retaining their own appraiser.
While the case began as a tax abatement fight between towns and the two utilities, DRA representatives have since expressed concerns about the impact a court decision could have on the validity of the DRA equalization process for the roughly 30 to 35 percent of N.H. municipalities that use the DRA method.
In March, Whitelaw wrote N.H. Attorney General Joseph Foster to express concerns that the NHAG involvement is tantamount to the NHAG joining the utilities’ efforts to overturn the BTLA’s decisions in 109 tax abatement appeals, many first filed in 2011 and 2012 and each year thereafter.
For the past four years, many towns, some having spent tens of thousands of dollars fighting the lawsuits and hiring appraisal experts, argue the case is about tax fairness.
Utility properties in many small towns make up a large chunk of the towns’ tax base, and to the extent the utilities are successful in their tax abatement appeals, it will increase the taxes of other taxpayers. In some smaller towns, such as Landaff, utility property is essentially the only commercial property.
In Littleton alone, Eversource is seeking to reduce its total assessment of about $22 million to $11 million.
Eversource is suing about one-third of N.H.’s municipalities, most small towns and many in the North Country, including Littleton, Bath, Haverhill, Lancaster, Dalton, Northumberland, Whitefield, Landaff, Stark, Stratford, and Stewartstown.
NHEC’s tax abatement appeals, filed at both the BTLA and superior court, are against towns that include Bath, Colebrook, Haverhill, Landaff, Littleton, and Monroe.
Stephan Hamilton, director of the DRA’s Municipal and Property Division, has declined to talk about the case as has NHAG Assistant Attorney General Laura Lombardi, who is representing the DRA.
Oral arguments before the N.H. Supreme Court could be heard in early 2017.
Monday, June 6, 2016
Wednesday, May 25, 2016
Littleton Courier and Coos County Democrat editorial, 5/25/2016 -
A bad week for Northern Pass
The level of negative public comments about Northern Pass was not surprising at a hearing in Whitefield on Thursday evening. Even with opposition to the project from all but one speaker, the hearing was not enough for the controversial hydropower transmission project to have a bad week. Additional facts learned Thursday could be downright devastating for Northern Pass, however. The Site Evaluation Committee and the Department of Environmental Services took steps to cause a big momentum shift toward those who oppose the project.
The SEC's decision to add nine months to the review of Northern Pass demonstrates what many have thought for a long time: The project is too complicated and impactful for a regulatory review to conclude by the original deadline, which was late this year. Now, with the decision date on a construction permit pushed to the end of September 2017, one wonders if Hydro Quebec, which would build Northern Pass with its partner Eversource, will decide the fight is not worth it. With nine more months to make their case, those who oppose the project have wind at their backs now.
Perhaps more devastating to the project, DES has issued a detailed list of regulatory findings that lead to one simple conclusion: The preferred route of the applicant will not receive wetlands and alteration of terrain permits in its current form. DES clearly supports more burial of the transmission lines, and Northern Pass is going to need to spend a lot more money on re-routing the project and making more people happy.
Another big question for the coming months will be whether the proposed Forward NH Fund, which promises millions in economic development for the state, can be considered as part of the benefits from Northern Pass. State law requires the SEC to determine the project is in the "public interest," and project opponents do not see why the fund should be considered part of the electricity transmission application. A determination that a public interest finding need not consider the fund's benefits would be an even bigger blow than what state regulators delivered last week.
Many residents in our region, with some justification, have wondered if the state's regulators were going to quickly approve Northern Pass, regardless of the strong opposition to the project in our region. The SEC and DES have proven they are not lap dogs of the utility industry by taking strong steps in a direction Hydro Quebec obviously does not want to go.
Maybe Hydro Quebec is not that concerned about pleasing people who live in the North Country. But they learned a big lesson this week: Failure to please regulators means more upfront costs during the application process, and therefore less profit from the long life they hope to wrest from Northern Pass infrastructure. This editor would now like to ask another question: Will the project ever happen? That is not as silly to ask as it may seem. After all, we are almost six years out from the original project proposal, and Northern Pass is nowhere close to moving its first speck of dirt along the transmission route.
Posted by NH Jean at 5:34 AM
Tuesday, April 5, 2016
Colebrook: Balsams’ Otten Asks Selectmen For Neutrality On Northern Pass
April 5, 2016
Three weeks after testifying at a hearing in support of Northern Pass, Balsams developer Les Otten weighed in on the project again when he asked Colebrook selectmen last week to jettison a paragraph encouraging burial of the proposed power line in a letter they sent to the N.H. Site Evaluation Committee.
During their March 28 meeting, selectmen voted 3-0 to send the letter, drafted by Selectman Susan Collins, to NHSEC stating, “The Colebrook selectboard recognizes the divisiveness that the Northern Pass project has created in our community and surrounding region. The town of Colebrook is not and has not been a party to the negative campaigns opposed to the transmission project.”
The selectmen then wrote, “The town of Colebrook does support the $200 million Forward New Hampshire fund and its stated goals of community betterment, clean energy innovation, economic development and tourism. If there was ever a need for accomplishing all four goals in northern Coos County and Colebrook, it is now.”
On March 8, at joint NHSEC-U.S. Department of Energy hearing on Northern Pass in Colebrook, Otten said the $143 million first-phase Balsams redevelopment will benefit from $2 million from Northern Pass with “the potential for a more substantial investment by the fund as Northern Pass progresses.”
In their letter, the Colebrook selectmen said the N.H. Forward fund has made a “significant financial commitment to The Balsams redevelopment” and the closure several years ago of the resort’s golf course in Colebrook “has negatively impacted Colebrook’s tax base.”
After selectmen last week voted to send the letter and its ending paragraph recommending burial to the SEC, Balsams developer Ed Brisson, who was at the March 28 meeting, contacted Otten, who drove to the meeting to encourage the board to remove it.
According to the draft meeting minutes, Otten expressed concerns that the letter’s words about burying the Northern Pass line sound like the selectmen have picked a side instead of staying neutral and letting the NHSEC decide.
The board voted unanimously to remove the paragraph.
“We intended to be neutral and felt it was, but other folks felt it wasn’t, and by taking out that particular paragraph we became more neutral,” Board of Selectman Chairman Greg Placy told the White Mountain Record Monday.
Placy said selectmen would not be averse to the town receiving money from the Forward N.H. fund, which he said could help the town with projects, among them Main Street reconstruction.
The board believes it should be neutral, with one reason being the line would not pass through Colebrook, said Placy.
Last week, Otten also met with executive board members of the Colebrook-based North Country Chamber of Commerce (NCCC), which is opposed to the Northern Pass towers, to ask them for the same neutrality. The NCCC is a NHSEC-granted intervenor in Northern Pass.
On Monday, Otten told the White Mountain Record he wanted to inform the Colebrook selectmen that the current Northern Pass plan before the NHSEC includes above-ground line and some buried line, 5,000 acres of land donation, and the $200 million Forward N.H. fund.
“There are a lot of things in the plan and if you said you were against it or you favored burial of the entire line you were against the plan,” said Otten. “I don’t think that has been entirely clear to everyone … I thought it was important for me, as a resident of Dixville and an investor so far, to inform the selectboard that for me I would rather see their position as neutral.”
On the chamber of commerce, Otten said, “When you take a business group that encompasses everyone from retired investment bankers to one-man businesses and that entity represents the community at large, I think it is appropriate for that institution to not take either side in that debate. I simply asked the executive board if I could present my point of view, and that is to take a neutral position, not for or against it, at the SEC.”
NCCC President Wayne Frizzell did not return a call Monday asking if the chamber will consider Otten’s request to be a neutral party in the chamber’s intervenor status with the NHSEC.
Money from the $200 million Forward N.H. fund would be disbursed to municipalities, businesses and organizations after an approval of the project.
Of the $2 million from Northern Pass for the Balsams redevelopment, Otten on Monday said, “What we have, we will owe. We have to pay it back. It’s a business negotiation between us and them and there are a lot of pieces to it.”
Opponents of the proposed towers, concerned about negative impacts to property values, scenic views and tourism, have said Northern Pass is trying to buy support for an unpopular project and argue Eversource Energy, parent company of Northern Pass, and partner Hydro-Quebec are unwilling to spend an additional $1 billion out of the billions of dollars they would make in profit to fully bury the line.
To expand the Balsams ski area, Otten has about 3,300 acres on the adjacent Bayroot property managed by Wagner Forest Management under option for purchase.
Wagner has entered into a lease agreement with Eversource to allow some 24 miles of Northern Pass towers on the Bayroot property.
Otten said his support of Northern Pass is not related to Eversource’s agreement with Wagner Forest Management and said Dixville Capital LLC, the Balsams’ redevelopment company, has had the Bayroot acres under option for some time.
Posted by NH Jean at 10:00 AM