HB 617-FN-LOCAL – AS INTRODUCED
2007 SESSION
09/01
HOUSE BILL 617-FN-LOCAL
AN ACT establishing a property tax relief program and fund and making an appropriation therefor.
SPONSORS: Rep. Kurk, Hills 7; Rep. Rowe, Hills 6
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. The bill also establishes a property tax relief fund and makes an appropriation to the fund.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
07-0301
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seven
AN ACT establishing a property tax relief program and fund and making an appropriation therefor.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Property Tax Relief. Amend RSA by inserting after chapter 76 the following new chapter:
CHAPTER 76-A
PROPERTY TAX RELIEF
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 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) A person shall not be considered a claimant under this chapter if household income exceeds $40,000, which amount shall be changed each year by the department of revenue administration beginning April 1, 2008, and each year thereafter, according to the change in the consumer price index and rounded to the nearest $100. 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. “Consumer Price Index” means the most recent consumer price index for northeast urban consumers published by the Bureau of Labor Statistics, United States Department of Labor.
III. “Department” means the department of revenue administration.
IV. “Excess 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, which are in excess of 10 percent of a claimant’s household income in the fiscal year in which said April 1 falls. 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, “excess property taxes” applies to 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 shall be 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.
V. “Homestead” means the dwelling which is owned by a claimant, and so much of the land surrounding it, not exceeding the minimum lot size required in the town or city, as is reasonably necessary for use of the dwelling as a home, 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. A dwelling and surrounding land shall not be considered a homestead for purposes of this chapter if it has an equalized valuation greater than the most recent median statewide purchase price for single family housing of all ages as calculated on an annual basis by the New Hampshire housing finance authority.
VI. “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.
VII. “Household income” means all income received by all persons of a household in a fiscal year while members of the household.
VIII.(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, 2007.
76-A:2 Claims for Property Tax Relief.
I.(a) A claimant shall be entitled to make claim to the department for property tax relief equal to the percentage of excess property taxes as follows:
Claimant’s total household Property tax
income between: relief percentage:
$0 and $9,999 100
$10,000 and $14,999 90
$15,000 and $19,999 80
$20,000 and $24,999 70
$25,000 and $29,999 50
$30,000 and $34,999 30
$35,000 and $39,999 10
(b) A claimant shall not be entitled to any property tax relief if there are no excess property taxes or for any excess property taxes which accrued prior to January 1, 2007.
(c) No claim with respect to relief under this chapter shall be allowed unless the claim is filed with the department during the period between May 1 and July 1 after the calendar year in which excess property taxes were assessed.
II. A claimant who is entitled to relief under this chapter shall also be entitled to receive any of the exemptions or credits to which the claimant may be entitled under RSA 72.
III. No interest shall be allowed on any relief to which a claimant may be entitled under this chapter.
76-A:3 Claim Payment. Subject to the provisions of RSA 76-A:4, the amount of relief to which the claimant is entitled under this chapter shall be paid to the claimant by the department within 60 days after the day on which timely claim was received by the department; provided, however, that such amount shall be paid jointly to the claimant and to the municipality in which the homestead is located if the property taxes on the homestead have not been paid at the time the claim for relief under this chapter is filed. 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.
76-A:4 Property Tax Relief Fund Established. There is hereby established in the office of the state treasurer a property tax relief fund. The moneys in such fund, including any interest thereon, shall be used exclusively to administer and make payments to claimants under this chapter and shall not lapse to the general fund. Such payments shall be charged against but shall not exceed the amount in the fund. If on July 1 of any year the department determines that it is likely that there will be insufficient moneys in the fund to pay in full all of the amounts to which claimants are likely to be entitled during that year, the department may reduce proportionately the amount to be paid to each claimant and may make such partial payments in one or more installments.
76-A:5 One Claimant Per Household. Only one claimant per household per year shall be entitled to relief under this chapter.
76-A:6 Right to File Claim. The right to file a claim under this chapter shall be personal to the claimant. The right to file a claim 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:7 Administration.
I. This chapter shall be administered and enforced by the department.
II. The department shall send to the appropriate official in the town or city in which a claimant’s homestead is located a copy of the final decision made by the department with respect to a claim.
76-A:8 Forms for Claim. The commissioner of revenue administration shall make available suitable 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, and a statement that the property taxes have been or will be paid by the claimant.
76-A:9 Audit of Claim. If, upon audit of any claim filed under this chapter, the department determines the amount of relief to have been incorrectly determined, the department shall recalculate the claim and assess and collect any excess amount in accordance with RSA 80.
76-A:10 Fraudulent Claims; Penalty.
I. If, after hearing, the department determines that a claim 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 claim or supplied information upon which the claim was prepared shall be guilty of a misdemeanor.
76-A:11 Appeals. Any person aggrieved by the denial in whole or in part of a claim under this chapter, except when the denial is based upon late filing of claim, 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:12 Claim Applied Against Outstanding Liabilities. The amount of any claim otherwise payable under this chapter may be applied by the department against any liability which the state has outstanding against the claimant or against anyone who was a member of the household in the taxable year to which the claim relates.
2 Education Trust Fund. Amend the introductory paragraph of RSA 198:39, I to read as follows:
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 and to approved charter schools pursuant to RSA 198:42[, and to provide low and moderate income homeowners property tax relief under RSA 198:56-198:61]. The state treasurer shall deposit into this fund immediately upon receipt:
3 Appropriation; Property Tax Relief Fund. The sum of $1 for the biennium ending June 30, 2009 is hereby appropriated to the property tax relief fund established in RSA 76-A:4, for the purposes of administration and payment of property tax relief claims pursuant to RSA 76-A. This appropriation shall be a charge on the education trust fund.
4 Repeals. The following are repealed:
I. RSA 21-1:18, I(l), relative to the purchase of services by the department of administrative services for the administration of low and moderate income homeowners property tax relief.
II. RSA 198:56-61, relative to low and moderate income homeowners property tax relief.
5 Effective Date. This act shall take effect April 1, 2007.
LBAO
07-0301
Revised 02/08/07
HB 617 FISCAL NOTE
AN ACT establishing a property tax relief program and fund and making an appropriation therefor.
FISCAL IMPACT:
The Department states this bill will increase state expenditures by $4,241,942 in FY 2008, by $4,204,050 in FY 2009, by $4,220,764 in FY 2010 and by $4,237,827 in FY 2011. There will be no fiscal impact on county and local expenditures or state, county, and local revenue.
This bill appropriates $1.00 from the education trust fund to the property tax relief fund in FY 2008.
METHODOLOGY:
The Department of Revenue Administration states this bill will repeal the low and moderate income homeowners property tax relief program and create a new property tax relief law as RSA 76-A. The Department states the repealing of the low and moderate income homeowners property tax relief program that benefited 22,500 applicants in FY 2005 will save the state $3,800,000; however the introduction of the new property tax relief program will cost $7,600,000. The Department assumes the income and homestead guidelines under the new program will result in at least twice the number of individuals being eligible for the program. Additionally, the Department states it will need to add 12 additional positions (7 clerks, 3 tax form examiners, and 2 tax auditors) to manage the increased volume of expected applicants. This bill does not provide an appropriation for increased expenditures or authorization for additional positions.
FY 2008 FY 2009 FY 2010 FY 2011
Clerk III (LG 8) $139,230 $145,100 $150,969 $157,112
Tax Form Examiner (LG 12) 69,908 72,599 75,699 78,683
Tax Auditors (LG 15) 52,455 54,756 57,057 59,436
Benefits (@48.3%) 126,349 131,595 137,039 142,596
Cubicle Cost 36,000
Computer Cost 18,000
Total $441,942 $404,050 $420,764 $437,827
The Department assumes expenditures will increase by $4,241,942 ($7,600,000 + $441,942 -$3,800,000) in FY 2008, by $4,204,050 ($7,600,000 + $404,050 -$3,800,000) in FY 2009, by $4,220,764 ($7,600,000 + $420,764 -$3,800,000) in FY 2010 and by $4,237,827 ($7,600,000 + $437,827 -$3,800,000) in FY 2011.