HB 1556-FN-A – AS INTRODUCED
2008 SESSION
09/10
HOUSE BILL 1556-FN-A
AN ACT establishing a property tax relief program.
SPONSORS: Rep. Kurk, Hills 7; Rep. Houde, Sull 1; Sen. Fuller Clark, Dist 24
COMMITTEE: Municipal and County Government
This bill establishes a property tax relief program based on taxpayer income and to be administered by the department of revenue administration. Participation in such program is optional for a municipality and may be authorized by a majority vote of its legislative body.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
08-2038
09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT establishing a property tax relief program.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Property Tax Relief Program. Amend RSA by inserting after chapter 76 the following new chapter:
CHAPTER 76-A
PROPERTY TAX RELIEF PROGRAM
76-A:1 Definitions. In this chapter:
I.(a) “Claimant” means a person who:
(1) Has filed a claim under this chapter; and
(2) During the 5 calendar years preceding the year in which the person files a claim for relief under this chapter:
(A) Had an ownership interest in a homestead, including an ownership interest in a homestead held in a trust, and was domiciled in the homestead upon which the property taxes have accrued and for which the person is making a claim for property tax relief in this state; and
(B) Was not a full-time student claimed as a dependent by any taxpayer under the United States Internal Revenue Code of 1986, as amended.
(b) When 2 or more individuals of a household are able to meet the qualifications for a claimant, they shall determine among themselves who the claimant shall be.
II. “Department” means the department of revenue administration.
III. “Homestead” means the dwelling which is owned by a claimant, and all of the land owned by the claimant surrounding the dwelling, which dwelling is occupied as the claimant’s principal place of residence for not less than 240 days in a calendar year. A homestead may consist of a part of a multi-dwelling and its proportionate share of the land upon which it is built and other common facilities. In this paragraph, the term “owned” includes a vendee in possession under a land contract and one or more joint tenants or tenants in common. It shall not include personal property such as furniture, furnishings, or appliances, but manufactured housing may be a homestead.
IV. “Household” means a claimant and all other adults who make the homestead their principal place of residence, as residence is defined in RSA 21:6-a. The adults in a household do not need to be related to one another or to the claimant by blood or marriage in order to be considered members of a household for the purposes of this paragraph.
V. “Household income” means all income received by all persons of a household in a fiscal year while members of the household.
VI.(a) “Income” means the sum of federal adjusted gross income as defined in the United States Internal Revenue Code of 1986, as amended, plus the following sums to the extent that they are not already included in a household’s adjusted gross income: the amount of capital gains excluded from adjusted gross income, alimony, support money, cash public assistance and relief, not including relief under this chapter, nontaxable strike benefits, the gross amount of any pension or annuity, including railroad retirement benefits and veterans disability pensions, amounts deducted for individual retirement accounts (IRAs), Keogh retirement plans, and self-employment pension (SEP) contributions, all compensation received under the Social Security Act and state unemployment laws, nontaxable interest received from the federal government or any of its instrumentalities, interest received from any state or subdivision thereof, workers’ compensation, and the gross amount of “loss of time” insurance.
(b) “Income” shall include only amounts received on and after January 1, 2008.
VII. “Median household income” means the median household income for the state of New Hampshire as determined on April 1 of each year by the department of revenue administration.
VIII. “Property taxes” means property taxes, assessed by the state under RSA 76:3, or by any county, municipality, or school district, based on assessed valuation after the deduction of allowable exemptions or credits to which a claimant may be entitled under RSA 72 and exclusive of special assessments, delinquent interest, and charges for service, assessed as of April 1 on a claimant’s homestead in this state. If a homestead is owned by 2 or more persons or entities as joint tenants or tenants in common, and one or more persons or entities are not members of the claimant’s household, “property taxes” means that part of property taxes levied on the homestead which reflects the ownership percentage of the claimant and the claimant’s household. If a homestead is an integral part of a larger unit such as a multi-dwelling building, the property taxes means that percentage of the total property taxes accrued as the total inhabitable area of the claimant’s dwelling is of the total inhabitable area of the building. In this paragraph, “unit” refers to the parcel of property covered by a single tax statement of which the homestead is a part.
76-A:2 Administration. This chapter shall be administered and enforced by the department.
76-A:3 Eligibility for Property Tax Relief Loans.
I. A claimant may file an application with the department for a property tax relief loan. The application shall be filed within 30 calendar days of receiving a property tax bill or, in the year in which a municipality decides pursuant to RSA 76-A:13 to participate in the property tax relief program, within 30 calendar days of the date such participation, whichever is later.
II. A claimant is eligible for a loan up to the following amounts:
If household income as a percentage then the maximum percentage of
of median household income is loan to property taxes is
0 – 39% 100%
40 – 59% 85%
60 – 69% 70%
70 – 79% 55%
80 – 89% 40%
90 – 100% 20%
Over 100% 0%
III. The claimant shall provide with his or her application evidence to the satisfaction of the department that the amount of his or her equity in the homestead after the issuance of the proposed loan is equal to at least 5 percent of the equalized assessed valuation of the homestead.
IV. A claimant under the age of 62 years shall not be eligible to participate in the property tax relief program in more than 5 property tax years.
V. A claimant shall not be eligible to receive a property tax relief loan for property taxes which accrued prior to January 1, 2008.
VI. A claimant who is eligible to receive a loan under this chapter shall also be eligible to receive any of the exemptions or credits to which the claimant may be entitled under RSA 72.
76-A:4 Payment and Conditions of Loans.
I. Within 10 business days of receipt of a claimant’s application, the department shall determine the claimant’s eligibility for the loan and the amount of the loan and make a payment in that amount to the appropriate municipal tax collector. If the department reasonably requires additional information in order to determine whether the claimant is entitled to relief, the payment date shall be extended accordingly and the claimant so informed. The department shall notify the claimant of the amount of the loan granted, the amount of interest which shall accrue, and the payment terms of the loan.
II. Interest shall accrue on the principal amount of the loan at an amount computed by the department as described in RSA 21-J:28.
III.(a) Except as provided in subparagraph (b), the claimant shall repay the principal and interest on the loan upon (i) the transfer or sale of the property or (ii) upon the death of the claimant or (iii) upon the filing of a subsequent lien on the property that reduces the claimant’s equity or (iv) if the claimant is under 55 years of age at the time of application, within 7 years of the date of the loan, whichever occurs first.
(b) Upon the claimant’s death, a person who is married to a claimant or who has entered a civil union with the claimant may assume the obligation for repayment of the principal and interest on the loan until such person transfers or sells the property or upon the death of such person, whichever occurs earlier.
(c) The claimant or person assuming the obligation of the claimant under subparagraph (b) may repay the principal and interest on the loan in full or in part at any time prior to the transfer or sale of the property or the death of the claimant.
IV. All payments of principal and interest shall be deposited by the state treasurer in the property tax relief revolving loan fund established in RSA 76-A:6.
76-A:5 Liens. All loans awarded to a claimant under this chapter shall be secured by a single lien on the claimant’s homestead. The lien shall be for the amount of principal and interest on all loans to be repaid by the claimant under this chapter. The lien shall be recorded in the registry of deeds of the county or counties in which the homestead is situated and shall have the same priority as liens in favor of the state for unpaid taxes; provided, however, that the lien shall not supersede any pre-existing lien created by a mortgage affecting such homestead. The lien shall expire only when the loan or loans have been fully repaid.
76-A:6 Property Tax Relief Revolving Loan Fund.
I. There is hereby established in the office of the state treasurer a fund to be known as the property tax relief revolving loan fund which shall be kept separate and distinct from other funds. Moneys in the fund shall be nonlapsing and shall be continually appropriated to the department of revenue administration for the purpose of providing property tax relief loans under this chapter.
II. To provide funds for the revolving loan fund established pursuant to this section, the state treasurer, as may be requested from time to time by the commissioner of revenue administration, is authorized to borrow from time to time upon the credit of the state such amounts so that the total state obligation shall at no time exceed $10,000,000 and for said purposes may issue bonds and notes at such time in the name and on behalf of the state of New Hampshire in accordance with the provisions of RSA 6-A. The department shall request and the treasurer shall issue bonds only for such amounts from time to time as are required for the purposes of this chapter and provided that the principal and interest payments can be satisfied from sums in the fund established in paragraph I.
III. The payments of principal and interest on the bonds issued under paragraph II shall be made when due from the special fund established by paragraph I.
76-A:7 One Claimant Per Household. Only one claimant per household per year shall be entitled to loans under this chapter.
76-A:8 Right to File Loan Application. The right to file a loan application under this chapter shall be personal to the claimant. The right to file an application under this chapter shall survive the claimant’s death to the extent that this right may be exercised on behalf of a claimant by a legal guardian, attorney, spouse, or another person who could have qualified as the claimant had the decedent not filed.
76-A:9 Loan Application Forms. The commissioner of revenue administration shall make available suitable loan application forms with instructions for claimants. Such forms may require claimants to provide all information reasonably necessary to determining the accuracy of claims, including, but not limited to, property taxes accrued, changes of homestead, household membership, household income, size and nature of property claimed as the homestead.
76-A:10 Audit of Loan Application. If, upon audit of any loan application filed under this chapter, the department determines the loan amount to have been incorrectly determined, the department shall recalculate the loan amount and assess and collect any excess amount in accordance with RSA 80.
76-A:11 Fraudulent Applications; Penalty.
I. If, after hearing, the department determines that a loan is excessive and was filed with fraudulent intent, the excess amount shall be assessed and collected in accordance with RSA 80.
II. The claimant in such case, and any person who, with fraudulent intent, assisted in the preparation or filing of the loan application or supplied information upon which the loan was awarded shall be guilty of a misdemeanor.
76-A:12 Appeals. Any person aggrieved by the denial in whole or in part of a loan application under this chapter, except when the denial is based upon late filing of the application, may appeal the denial to the superior court in the county in which the person resides by filing a petition within 30 days after such denial.
76-A:13 Local Approval Required.
I. A municipality may participate in the property tax relief program under this chapter only if its participation is approved in the following manner:
(a) In a town, other than a town that has adopted a charter pursuant to RSA 49-D, the question shall be placed on the warrant of a special or annual town meeting, by the governing body or by petition pursuant to RSA 39:3.
(b) In a city or town that has adopted a charter pursuant to RSA 49-C or RSA 49-D, the legislative body may consider and act upon the question in accordance with its normal procedures for passage of resolutions, ordinances, and other legislation. In the alternative, the legislative body of such municipality may vote to place the question on the official ballot for any regular municipal election.
II. If a majority of those voting on the question vote “yes,” the municipality shall begin participation in the property tax relief program under this chapter in the tax year beginning April 1 in the year of its adoption or in the year following its adoption, at the option of the local governing body.
III. A municipality may rescind its vote to participate in the property tax relief program under this chapter in the manner described in this section.
2 New Subparagraph; Special Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (268) the following new subparagraph:
(269) Moneys deposited in the property tax relief revolving loan fund established in RSA 76-A:6.
3 Effective Date. This act shall take effect January 1, 2009.
LBAO
08-2038
12/10/07
HB 1556-FN-A - FISCAL NOTE
AN ACT establishing a property tax relief program.
FISCAL IMPACT:
The Department of Justice, the Department of Revenue Administration, the Judicial Branch, the Judicial Council, and the New Hampshire Association of Counties state this bill may increase state and county expenditures by an indeterminable amount in FY 2009 and each year thereafter. There will be no fiscal impact on local expenditures or state, county, and local revenue.
METHODOLOGY:
The Department of Justice, the Department of Revenue Administration, the Judicial Branch, the Judicial Council, the New Hampshire Association of Counties and the New Hampshire Municipal Association state this bill establishes a property relief program based on taxpayer income that will be administered by the Department of Revenue Administration. This bill establishes a misdemeanor for fraudulent applications and an appeals process to the Superior Court for the denial of an application for reasons other than timeliness of application. The Department of Justice states this bill may increase the Department’s expenditures due to increased legal counsel advice provided to the Department of Revenue and appeals of decisions by the Department of Revenue Administration to the Superior Court. The Department is unable to estimate how many people would file under this bill or how many of the Department of Revenue Administration’s decisions would be appealed to the Superior Court.
The Department of Revenue Administration states this bill will increase state general fund expenditures by an indeterminable amount. The Department is unable to determine the fiscal impact of this bill because it does not know how many municipalities will choose to participate in the program, the number of eligible claimants, or the amount of property tax a claimant would want to take a loan for at the interest rate set in RSA 21-J:28. However, the Department does state this bill will necessitate the creation of a loan/banking division with the Department.
The Judicial Branch states this bill establishes an unspecified misdemeanor and allows for appeals to the Superior Court for the denial of loan applications unless the denial is based on the timeliness of an application. The Branch has no information to estimate how many misdemeanor charges would be brought as a result of this bill or appeals would be made to the Superior Court. The Branch states the cost of an unspecified misdemeanor case in the district court is $34.68 in FY 2009 and $35.75 in FY 2010 and each year thereafter. The Branch estimates it would take 289 cases in FY 2009 or 280 cases in FY 2010 and each year thereafter to have a fiscal impact that exceeds $10,000.
The Branch states using the judicial needs assessment study, appeals to the Superior Court for the denial of loan applications would be considered complex equity cases. The weighted caseload for complex equity cases is 230 minutes of judicial time and 355 minutes of clerical time. In FY 2009, judicial time is $1.5708 per minute and clerical time is $0.3662 per minute. This rate increases in FY 2010 to $1.6195 per minute for judicial time and $0.3775 per minute for clerical time. The cost of a complex equity case in FY 2009 is $491.28 ((230 judicial minutes * $1.5708) + (355 clerical minutes * $0.3662)) and in FY 2010 and each year thereafter is $506.50 ((230 judicial minutes * $1.6195) + (355 clerical minutes * $0.3775)). The Branch estimates if this bill resulted in 21 additional cases to the Superior Court in FY 2009 and 20 cases in FY 2010 and each year thereafter, the fiscal impact would exceed $10,000 annually. However, if a single case were to be appealed to the New Hampshire Supreme Court, the fiscal impact would be in excess of $10,000.
The Judicial Council states this bill may result in increased general fund expenditures but is unable to determine the fiscal impact. The Council states if an individual is found to be indigent, the flat fee of $275 per misdemeanor is charged by a public defender or contract attorney. If an assigned counsel attorney is used the fee is $60 per hour with a cap of $1,400 (effective January 1, 2008). The Council also states additional costs could be incurred if an appeal is filed. The public defender, contract attorney, and assigned counsel rates for Supreme Court appeals will be $2,000 per case (effective January 1, 2008), with many assigned counsel attorneys seeking permission to exceed the fee cap. However, such motions to exceed the fee cap are seldom granted. Finally, expenditures would increase if services other than counsel are requested and approved by the court during the defense of a case or during an appeal.
The New Hampshire Association of Counties states to the extent any individual is prosecuted, convicted, and sentenced to incarceration, the counties may have increased expenditures. The Association is unable to determine the number of individuals who might be detained or incarcerated as a result of this bill. The average cost to incarcerate an individual in a county facility is $29,000 a year.
The New Hampshire Municipal Association states participation in the property tax relief program is optional for municipalities and is administered by the Department of Revenue Administration; therefore it does not have an impact on local expenditures.