HB 1335 – AS AMENDED BY THE HOUSE
18Mar2010… 0662h
18Mar2010… 0992h
2010 SESSION
10/03
HOUSE BILL 1335
AN ACT establishing a local option to authorize the governing body to set the interest rate on late and delinquent property tax payments, subsequent payments, and other unpaid taxes.
SPONSORS: Rep. Vaillancourt, Hills 15; Rep. Kepner, Rock 15; Rep. Henson, Rock 13; Rep. T. Russell, Rock 13
COMMITTEE: Local and Regulated Revenues
This bill allows municipalities to authorize the governing body of the town or city to set the interest rate on late and delinquent property tax payments, subsequent payments, and other unpaid taxes enforced through the lien procedure.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
18Mar2010… 0662h
18Mar2010… 0992h
10-2092
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT establishing a local option to authorize the governing body to set the interest rate on late and delinquent property tax payments, subsequent payments, and other unpaid taxes.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Interest Rates; Local Option. Amend RSA 76 by inserting after section 13-b the following new section:
76:13-c Interest Rates; Local Option.
I. Any town or city may authorize the governing body to set interest rates as provided for in this section and apply such rates to all applicable statutes requiring the charging of interest on unpaid property taxes, delinquent and subsequent tax payments, and other unpaid taxes, 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 town or city may vote to place the question on the official ballot for any regular municipal election.
II. The vote shall specify the authority of the governing body to set interest rates as provided for in paragraph IV. If a majority of those voting on the question vote “yes,” the authority for the governing body to set interest rates pursuant to paragraph IV shall take effect immediately and the governing body may set the rate for the town or city applicable to the tax year beginning April 1 following its adoption.
III. A town or city that has adopted the provisions of this section may rescind the authority of the governing body to set interest rates in the manner described in paragraph I. The question to be voted shall specify that the authority of the governing body to set interest rates shall be rescinded. If a majority of those voting on the question vote “yes,” the authority for the governing body to set interest rates shall be rescinded and beginning on the April 1 following rescission, the statutory interest rates shall apply.
IV.(a) In lieu of the statutory rate of 12 percent per annum, the governing body may set a rate within the range of 6 percent up to 12 percent.
(b) In lieu of the statutory rate of 18 percent per annum, the governing body may set a rate within the range of 9 percent up to 18 percent.
(c) The rates set by the governing body pursuant to the authority in this section shall apply for assessments of interest beginning April 1 and shall be effective for the entire tax year and until further changed. Any subsequent change in the rates by the governing body pursuant to the authority in this section shall apply beginning on the April 1 for the following tax year.
2 Local Interest Rate; Pease Development Authority Lessees. Amend RSA 12-G:14, II(b)(1) to read as follows:
(1) Interest shall accrue on the unpaid taxes at a rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, from the due date until such taxes are paid;
3 Excavation Taxes. Amend RSA 72-B:6 to read as follows:
72-B:6 Unpaid Taxes. The taxes which are not paid when due pursuant to RSA 72-B:4 shall bear interest at the rate of 18 percent per year, or the rate set pursuant to RSA 76:13-c, computed from the due date. Interest and penalties on the tax shall be collected by the tax collector and deposited in the general fund of the municipality. In addition to the interest due, a penalty for failure to pay may be assessed against the owner as provided in RSA 21-J:33.
4 Property Taxes; Interest on Late Payment. Amend RSA 76:13 to read as follows:
76:13 Interest. Interest at 12 percent per annum, or the rate set pursuant to RSA 76:13-c, shall be charged upon all taxes except resident taxes, except as otherwise provided by statute, not paid on or before December 1 after their assessment, which shall be collected from that date with the taxes as incident thereto, except in the case where a tax bill sent to the taxpayer on or after November 2 and before April 1 of the following year interest shall not be charged until 30 days after the bills are mailed. Interest due in an amount up to $25 may be waived by the collector, with the approval and consent of the board of selectmen and the board of assessors, if in the collector’s judgment the administrative and collection costs involved do not warrant collection of the amount due. The tax collector shall state on the tax bill the date from which interest will be charged and such date shall be determined by the day the collector sends out the last tax bill on the list. The collector shall notify the board of tax and land appeals in writing of the date on which the last tax bill was sent.
5 Property Taxes; Quarterly Billing. Amend RSA 76:15-aa, IV to read as follows:
IV. Interest at the rate of 12 percent per annum, or the rate set pursuant to RSA 76:13-c, shall be charged on all taxes not paid on or before their due dates or 30 days after mailing, whichever is later.
6 Current Use; Land Use Change Tax. Amend RSA 79-A:7, II(d) to read as follows:
(d) Payment of the land use change tax, together with the recording fees due the register of deeds, shall be due not later than 30 days after mailing of the tax bills for such tax, and interest at the rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, shall be due thereafter on any taxes not paid within the 30-day period.
7 Discretionary Easements. Amend RSA 79-C:9, II(d) to read as follows:
(d) Payment of the consideration shall be due not later than 30 days after the mailing of the bill. Interest at the rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, shall be due thereafter on any consideration not paid within the 30-day period.
8 Discretionary Preservation Easements. Amend RSA 79-D:9, II(d) to read as follows:
(d) Payment of the consideration shall be due not later than 30 days after the mailing of the bill. Interest at the rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, shall be due thereafter on any consideration not paid within the 30-day period.
9 Community Revitalization Tax Relief Incentive. Amend RSA 79-E:9, II(d) to read as follows:
(d) Payment shall be due not later than 30 days after the mailing of the bill. Interest at the rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, shall be due thereafter on any amount not paid within the 30-day period. Interest at 12 percent per annum, or the rate set pursuant to RSA 76:13-c, 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.
10 Collection of Taxes; Tax Sales; Redemption; Interest Rate. Amend RSA 80:32 to read as follows:
80:32 Redemption. Any person with a legal interest in land so sold may redeem the same by paying or tendering to the collector, or in his or her absence, at his or her usual place of abode, at any time before a deed thereof is given by the collector, the amount for which the land was sold, with interest at 18 percent per annum, or the rate set pursuant to RSA 76:13-c, upon the whole amount for which the land was sold from the time of sale to the time of payment in full, except that in the case of partial payments in redemption made under RSA 80:33-a, the interest shall be computed on the unpaid balance, together with redemption costs and costs for notifying the mortgagees, if any. In case the tax collector who sold the property in question shall have died, become incapacitated, been removed from office or removed from the town or city, or shall have been discharged from his or her bond by the selectmen or assessors, then the person with the legal interest in redeeming the property may tender such sums to the tax collector then in office of said city or town. Upon advice from the selectmen or assessors that the amount tendered is the correct amount due, the tax collector shall accept said amount for the redemption of the property.
11 Collection of Taxes; Tax Sales; Subsequent Tax; Interest Rate. Amend RSA 80:37 to read as follows:
80:37 Payment of Subsequent Tax. For purposes of this section, “subsequent tax” shall mean any tax assessed upon the real estate subsequent to that for which it was sold by a municipality, a county, or the state. The purchaser of real estate at any tax sale may pay to the collector any subsequent tax and the collector shall, within 30 days after such payment, notify the register of deeds thereof, giving the date and the amount of such payment and the name of the person so paying together with the date of the tax sale, the name of the person taxed, and a description of the property sold as shown in the report of sale recorded in the registry of deeds. The collector of taxes shall receive $1 for such notice to the register of deeds of the payment of subsequent tax plus $1 to be paid to the register of deeds. The purchaser, within 30 days of payment of the subsequent tax, shall personally, or by certified mail, notify in writing any mortgagee who was notified of his or her purchase at the tax sale of this payment of the subsequent tax. The purchaser paying the subsequent tax shall receive the same fees prescribed for notifying the mortgagee of his or her purchase at the tax sale to be included in his or her costs to be paid by the person making redemption, except that when a town is a purchaser at a tax sale and the town pays a subsequent tax and the selectmen direct the collector of taxes as agent for the town to give notice of payment of a subsequent tax to any mortgagee who was notified of the purchase by the town at the tax sale, the collector shall be paid the sum of $5 for this service. Any amounts so paid on account of subsequent taxes, together with interest thereon at the rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, from the date of payment shall, in addition to the purchase price at the time of sale with accrued interest and costs, be paid by the person making redemption.
12 Collection of Taxes; Tax Liens; Redemption; Interest Rate. Amend RSA 80:69 to read as follows:
80:69 Redemption. Any person with a legal interest in land subject to a real estate tax lien may redeem the same by paying or tendering to the collector, at any time before a deed thereof is given by the collector, the amount of the real estate lien, with interest at 18 percent per annum, or the rate set pursuant to RSA 76:13-c, upon the whole amount of the recorded lien from the date of execution to the time of payment in full, except that in the case of partial payments in redemption made under RSA 80:71, the interest shall be computed on the unpaid balance, together with redemption costs and costs for identifying and notifying the mortgagees, if any. In case the tax collector who executed the tax lien against the property in question shall have died, become incapacitated, been removed from office or removed from the town or city, or shall have been discharged from his or her bond by the selectmen or assessors, then the person with the legal interest in redeeming the property may tender such sums to the tax collector then in office of said city or town. Upon advice from the selectmen or assessors that the amount tendered is the correct amount due, the tax collector shall accept said amount for the redemption of the property.
13 Collection of Taxes; Tax Liens; Interest Rate. Amend RSA 80:75, III to read as follows:
III. When a municipality is the lienholder and the municipality pays a subsequent tax and the selectmen direct the collector of taxes, as agent of the municipality, to give such notice of said payment to any owner and to any mortgagee as provided above, the collector of taxes shall receive the same fees provided for the lienholder for his or her service. The amount of subsequent taxes paid, together with interest on such taxes at the rate of 18 percent per annum, or the rate set pursuant to RSA 76:13-c, from the date of payment shall, in addition to the tax lien amount at the time of execution with interest and costs, be paid by the person making redemption.
14 Unpaid Taxes; Normal Yield Tax. Amend RSA 79:4-a to read as follows:
79:4-a Unpaid Taxes. The taxes which are not paid when due pursuant to RSA 79:3 shall bear interest at the rate of 18 percent per year, or the rate set pursuant to RSA 76:13-c, computed from the due date. Interest and penalties on the tax shall be collected by the tax collector and deposited in the general fund of the town. In addition to the interest due, a penalty for failure to pay may be assessed against the owner as provided in RSA 21-J:33.
15 Effective Date. This act shall take effect upon its passage.
LBAO
10-2092 Amended 04/06/10
HB 1335 FISCAL NOTE
AN ACT establishing a local option to authorize the governing body to set the interest rate on late and delinquent property tax payments, subsequent payments, and other unpaid taxes.
FISCAL IMPACT:
The Department of Revenue Administration and the New Hampshire Municipal Association state this bill, as amended by the House (Amendments #2010-0662h and #2010-0992h), may decrease local revenue and increase local expenditures by indeterminable amounts in FY 2010 and each year thereafter. There is no fiscal impact on state and county revenue or expenditures.
METHODOLOGY:
The Department of Revenue Administration and the New Hampshire Municipal Association state this bill will allow municipalities to lower the interest rate they charge on delinquent taxes. The Department and the Association state by lowering the interest rate, local revenue will decrease through lower interest revenue. The Department also states the lower interest rate may decrease the timely payment of the taxes subject to the rate, as property owners will pay higher interest rate debt, such as credit card debt, before property taxes. The Department states this decrease in the timely payment of taxes could put pressure on the cash flows of local governments, forcing them to borrow more to fund operations and increasing debt service expenditures. Neither the Department nor the Association possesses sufficient data on the local income generated by interest on delinquent taxes, nor can they predict the specific impact of the proposed legislation.