[Adopted 5-14-2012]
Community Revitalization Tax Relief Incentive, RSA 79-E; State
Economic Growth, Resource Protection and Planning Policy, RSA 9-B;
Appraisal of Taxed Property, RSA 75:1; Collection of Taxes, RSA 80:1
through 80:42-a; and Administrative Procedure Act, RSA 541-A.
Pursuant to the authority granted by RSA 79-E (Attachment A),[1] the Town of Derry adopts the Downtown Derry Revitalization
Tax Relief Program, for application within the geographical limits
of the revitalization district described herein as Attachment A: "Downtown
Revitalization District."
[1]
Editor's Note: Attachment A is included at the end of this chapter.
Downtown Derry Revitalization Tax Relief Program.
New Hampshire Statutes, RSA Title V, Taxation, Chapter 79-E,
Community Revitalization Tax Relief Incentive.
A.
It is declared to be a public benefit to enhance the Town of Derry's
downtown and town center with respect to economic activity, cultural
and historic character, sense of community, and in-town residential
uses that contribute to economic and social vitality.
B.
It is further declared to be a public benefit to encourage the rehabilitation
of the many underutilized structures in our urban and town center
as a means of encouraging growth of economic, residential, and municipal
uses in a more compact pattern, in accordance with RSA 9-B.
C.
Short-term property assessment tax relief and a related covenant
to protect the public benefit as provided under this article are considered
to provide a demonstrated public benefit if it encourages substantial
rehabilitation and use of qualifying structures, or in certain cases,
the replacement of a qualifying structure, as defined in this article.
A.
The Town of Derry hereby adopts RSA 79-E in the manner specified
under RSA 79-E:3. In addition, the Town may modify the incentive program
to best suit the needs of the Town and its constituents.
B.
The governing body shall herein refer to the Derry Town Council.
(The Council may designate an agent as permitted per Town Charter.)
In the interpretation and enforcement of this article, all words
other than those defined specifically below shall have the meanings
implied by their context in the article or the ordinarily accepted
meanings. For the purpose of this article, the following definitions
shall apply unless the context clearly indicates or requires a different
meaning.
The assessed valuation of the improvements/structures as
of April 1 within the tax year time line the application is made,
pursuant to RSA 79-E.
A formal and legally binding agreement or contract such as
a lease, or one of the clauses in an agreement of this kind.
A building located in the "Revitalization District" as per
the attached map.[1]
The demolition or removal of a qualifying structure and the
subsequent construction of a new structure on the same lot.
Rehabilitation of a qualifying structure which costs at least
15% of the property's improvements and/or structures pre-rehabilitation
assessed valuation, or at least $75,000, whichever is less. The Town
Council may further limit "substantial rehabilitation'' according
to the procedure in RSA 79-E:3 as meaning rehabilitation which costs
a percentage greater than 15% of pre-rehabilitation assessed valuation
or an amount greater than $75,000 based on local economic conditions,
community character, and local planning and development goals.
Any district established in accordance with the provisions
of RSA 162-K. (The Town of Derry, through action of the Derry Town
Council, adopted the provisions of RSA 162-K on May 7, 2002.)
For a qualifying structure, that for a period of time determined
by the Town Council in accordance with this article, the property
tax on a qualifying structure shall not increase as a result of the
substantial rehabilitation thereof.
For the replacement of a qualifying structure, that for a period
of time determined by the Town Council in accordance with this article,
the property tax on a replacement structure shall not exceed the property
tax on the replaced qualifying structure as a result of the replacement
thereof.
The finite period of time during which the tax relief will
be effective, as determined by the Town Council body pursuant to RSA
79-E:5.
[1]
Editor's Note: Said map is included at the end of this chapter.
In order to qualify for tax relief under this article, the proposed
substantial rehabilitation must provide one or more of the following
public benefits, and the proposed replacement must provide one or
more of the same public benefits to a greater degree than would a
substantial rehabilitation of the same qualifying structure, as follows:
A.
It enhances the economic vitality of the district;
B.
It enhances and improves a structure that is culturally or historically
important on a local, regional, state, or national level, either independently
or within the context of an historic district, town center, or village
center in which the building is located;
C.
It promotes development of municipal centers, providing for efficiency,
safety, and a greater sense of community, consistent with RSA 9-B;
or
D.
It increases residential housing in town centers.
A.
Tax relief for the substantial rehabilitation or replacement of a
qualifying structure shall only be effective after a property owner
grants to the municipality a covenant ensuring that the structure(s)
shall be maintained and used in a manner that furthers the public
benefit for which the tax relief was granted and as otherwise provided
in this article.
B.
This covenant shall be coextensive with the tax relief period. The
covenant may, if required by the Town Council, be effective for a
period of time up to twice the duration of the tax relief period.
C.
The covenant shall include provisions requiring the property owner
to obtain casualty insurance, and flood insurance if appropriate.
The covenant may include, at the governing body's sole discretion,
a lien against proceeds from casualty and flood insurance claims for
the purpose of ensuring proper restoration or demolition of damaged
structures and property. If the property owner has not begun the process
of restoration, rebuilding, or demolition of such structure within
one year following damage or destruction, the property owner shall
be subject to the termination of provisions set forth in RSA 79-E:9,
I.
D.
The Town shall provide for the recording of the covenant to protect
public benefit with the registry of deeds. It shall be a burden upon
the property and shall bind all transferees and assignees of such
property.
Substantial rehabilitation or replacement of a structure: An
owner (or agent) of a qualifying structure that is located in the
district, who intends to substantially rehabilitate or replace such
structure, may, apply to the Planning Department for this tax relief.
The applicant shall include the address of the property, a full description
of the intended rehabilitation or replacement, any changes in use
of the property resulting from the rehabilitation or replacement,
and an application fee. The application shall be on a pre-approved
application form provided by the Town Planning Department.
A.
In instances where a qualifying structure is determined to possess
no significant historical, cultural, or architectural value and for
which the governing body makes a specific finding that rehabilitation
would not achieve one or more of the public benefits established in
RSA 79-E:7, to the same degree as the replacement of the underutilized
structure with a new structure, the tax relief incentives provided
under this article may be extended to the replacement of an underutilized
structure in accordance with the provisions of this article.
B.
In order to assist the planning staff with the review and evaluation
of an application for replacement of a qualifying structure, an owner
shall submit to the Town Council as part of the application a New
Hampshire Division of Historical Resources individual resource inventory
form, prepared by a qualified architectural historian and a letter
issued by the local heritage commission, and if the qualifying structure
is located within a designated historic district established in accordance
with RSA 674:46, a letter from the historic district commission or,
if such local commissions are not established, a letter issued by
the New Hampshire Division of Historical Resources that identifies
any and all historical, cultural, and architectural value of the structure
or structures that are proposed to be replaced and the property on
which those structures are located.
C.
In connection with these findings, the governing body may request
that the Division of Historical Resources conduct a technical evaluation
in order to satisfy the governing body that historical resources will
not be adversely affected.
D.
The application for tax relief shall not be deemed to be complete
and the governing body shall not schedule the public hearing on the
application for replacement of a qualifying structure as required
under RSA 79-E:4, II, until the letter, as well as all other required
information, has been submitted.
A.
An application fee of $150, or the amount subsequently adopted by
the Town Council, shall be paid at the time of application submission
to the Planning Department, made out to the "Town of Derry."
B.
The applicant shall also be responsible for the reasonable expenses
incurred by the municipality in the drafting, review, and/or execution
of the covenant. If the application is approved, the applicant shall
be responsible for the cost of recording the covenant.
A.
Upon receipt of an application, the governing body shall hold a duly
noticed public hearing to take place no later than 60 days from receipt
of the complete application, to determine whether:
B.
The Council may seek assistance from Town officials, legal counsel,
boards or commissions in making its determinations.
C.
No later than 45 days after the public hearing, the governing body
shall render a decision granting or denying the requested tax relief
and, if so granting, establish the tax relief period.
D.
After following the procedures established herein, the governing
body may grant the tax relief, provided:
(1)
The governing body finds a public benefit under RSA 79-E:7; and
(2)
The specific public benefit is preserved through a covenant under
RSA 79-E:8; and
(3)
The governing body finds that the proposed use is consistent with
the municipality's master plan or development regulations; and/or
(4)
In the case of a replacement, the governing body specifically finds
that the local heritage commission has determined that:
(a)
The replaced qualifying structure does not possess significant
historical, cultural, or architectural value;
(b)
The replacement of the qualifying structure will achieve one
or more of the public benefits identified in RSA 79-E:7 to a greater
degree than the renovation of the underutilized structure; and
(c)
The historical, cultural, or architectural resources in the
community will not be adversely affected by the replacement.
E.
If the governing body grants the tax relief, the governing body shall
identify the specific public benefit achieved under RSA 79-E:7, and
shall determine the precise terms and duration of the covenant to
preserve the public benefit under RSA 79-E:8.
F.
If the governing body, in its sole discretion, denies the application
for tax relief, such denial shall be accompanied by a written explanation.
The governing body's decision may be appealed either to the Board
of Tax and Land Appeals or the Superior Court in the same manner as
provided for appeals of current use classification pursuant to RSA
79-A:9 or 79-A:11; provided, however, that such denial shall be deemed
discretionary and shall not be set aside by the Board of Tax and Land
Appeals or the Superior Court except for bad faith or discrimination.
Tax incremental financing district (TIF): The Town shall have
no obligation to grant an application for tax relief for properties
located within tax increment finance (TIF) districts when the governing
body determines, in its sole discretion, that the granting of tax
relief will impede, reduce, or negatively affect:
A.
The development program or financing plans for such tax increment
finance districts; or
B.
The ability to satisfy or expedite repayment of debt service obligations
incurred for a tax increment financing district; or
C.
The ability to satisfy program administration, operating, or maintenance
expenses within a tax increment financing district.
The provisions of this article shall not apply to properties
whose rehabilitation or construction is subsidized by state or federal
grants or funds that do not need to be repaid totaling more than 50%
of construction costs from state or federal programs.
A.
The Town Council may grant such tax assessment relief for a period
of up to five years, beginning with the completion of the substantial
rehabilitation. (The issuance of a certificate of occupancy determines
completion.)
B.
For the approval of a replacement of a qualifying structure, the
Town Council may grant such tax assessment relief for a period of
up to five years, beginning only upon the completion of construction
of the replacement structure. (The issuance of a certificate of occupancy
determines completion.)
C.
The governing body may, in its sole discretion, extend such additional
years of tax relief:
(1)
Up to an additional two years of tax relief for a project that results
in new residential units; or
(2)
Up to four years for a project that includes affordable housing;
or
(3)
Up to an additional four years of tax relief for the substantial
rehabilitation of a qualifying structure that is listed on or determined
eligible for listing on the National Register of Historic Places,
State Register of Historic Places, or is located within and is important
to a locally designated historic district, provided that the substantial
rehabilitation is conducted in accordance with the U.S. Secretary
of Interior's Standards for Rehabilitation.
D.
No such additional years of tax relief may be provided prior to the
completion of construction of the replacement structure. The municipal
tax assessment of the replacement structure and the property on which
it is located shall not increase or decrease in the period between
the approval by the governing body of tax relief for the replacement
structure and the time the owner completes construction of the replacement
structure and grants to the municipality the covenant to protect the
public benefit as required by this article. The governing body may
not grant any tax assessment relief under this article with respect
to property and structures for which an election has been made for
property appraisal under RSA 75:1-a.
E.
The Town Council may adopt additional local guidelines to assist
it in determining the appropriate duration of the tax assessment relief
period.
Upon expiration of the tax relief period, the property shall
be taxed at its market value in accordance with RSA 75:1 at the date
of April 1 of said year.
The real estate of every person shall be held for the taxes
levied pursuant to RSA 79-E:9.
A.
Tax relief granted under this article shall be calculated on the
value in excess of the original assessed value. "Original assessed
value" shall mean the value of the qualifying structure assessed at
the time that the governing body approves the application for tax
relief and the owner grants to the municipality the covenant to protect
public benefit as required in this article.
B.
Tax relief granted under this article shall pertain only to assessment
increases attributable to the substantial rehabilitation performed
under the conditions approved by the governing body and not to those
increases attributable to other factors, including but not limited
to market forces, such as revaluation and/or periodic assessment updates.
C.
The tax relief granted under this article shall only apply to substantial
rehabilitation or replacement that commences after the governing body
approves the application for tax relief and the owner grants to the
municipality the covenant to protect the public benefit as required
in this article.
The Town of Derry will abide by any rules the Commissioner of
the Department of Revenue Administration adopts, pursuant to RSA 541-A,
relative to the payment and collection procedures under Chapter 19,
Sec. 19-24 (RSA 79-E:9).
Once the application is received and deemed complete, the Town
will notify the applicant of the date of the required public hearing.
A.
Termination of covenant; reduction of tax relief; penalty. If the owner fails to maintain or utilize the building according to the terms of the covenant, or fails to restore, rebuild, or demolish the structure following damage or destruction as provided in RSA 79-E:8, III, the governing body shall, after a duly noticed public hearing, determine whether and to what extent the public benefit of the rehabilitation or replacement has been diminished and shall determine whether to terminate or reduce the tax relief period in accordance with such determination. If the covenant is terminated, the governing body shall assess all past taxes to the owner as though no tax relief was granted, with interest in accordance with Subsection B(4).
B.
Any tax payment required under Subsection A shall be payable according to the following procedure:
(1)
The Commissioner of the Department of Revenue Administration shall
prescribe and issue forms to the local assessing officials for the
payment due, which shall provide a description of the property, the
market value assessment according to RSA 75:1, and the amount payable.
(2)
The prescribed form shall be prepared in quadruplicate. The original,
duplicate, and triplicate copy of the form shall be given to the collector
of taxes for collection of the payment along with a special tax warrant
authorizing the collector to collect the payment under the warrant.
The quadruplicate copy of the form shall be retained by the local
assessing officials for their records.
(3)
Upon receipt of the special tax warrant and prescribed forms, the
tax collector shall mail the (duplicate) copy of the tax bill to the
owner responsible for the tax as the notice of payment.
(4)
Payment shall be due not later than 30 days after the mailing of
the bill. Interest at the rate of 18% per annum shall be due thereafter
on any amount not paid within the thirty-day period. Interest at 12%
per annum shall be charged upon all taxes that would have been due
and payable on or before December 1 of each tax year as if no tax
relief had been granted.
All taxes levied pursuant to RSA 79-E:9 which are not paid when
due shall be collected in the same manner as provided in RSA 80.
