Revision: April 27, 2018, 8:36 a.m.
HB 1673-FN-LOCAL - AS AMENDED BY THE SENATE
04/26/2018 1805s
2018 SESSION
18-2206
05/10
HOUSE BILL 1673-FN-LOCAL
AN ACT relative to the interest charged on late and delinquent property tax payments.
SPONSORS: Rep. Scully, Hills. 33; Rep. Murotake, Hills. 32; Rep. Hynes, Hills. 21; Rep. Ferreira, Hills. 28; Rep. Bates, Rock. 7; Sen. Giuda, Dist 2
COMMITTEE: Ways and Means
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AMENDED ANALYSIS
This bill lowers the interest rate charged on late and delinquent property tax payments from 12 to 8 percent and 18 to 14 percent per annum.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
04/26/2018 1805s 18-2206
05/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eighteen
AN ACT relative to the interest charged on late and delinquent property tax payments.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Apportionment, Assessment, and Abatement of Taxes; Interest. Amend RSA 76:13 to read as follows:
76:13 Interest. Interest at [12] 8 percent per annum 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.
2 Property Taxes; Quarterly Billing. Amend RSA 76:15-aa, IV to read as follows:
IV. Interest at the rate of [12] 8 percent per annum shall be charged on all taxes not paid on or before their due dates or 30 days after mailing, whichever is later.
3 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] 14 percent per annum 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.
4 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 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] the 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] 14 percent per annum 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.
5 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] 14 percent per annum 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.
6 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 service. The amount of subsequent taxes paid, together with interest on such taxes at the rate of [18] 14 percent per annum 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.
7 Applicability. The interest rate of 8 percent established in sections 1 and 2 of this act and the interest rate of 14 percent established in sections 3-6 of this act shall apply to taxes assessed on or after April 1, 2019.
8 Effective Date. This act shall take effect April 1, 2019.
18-2206
11/8/17
HB 1673-FN-LOCAL- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the interest charged on late and delinquent property tax payments.
FISCAL IMPACT: [ ] State [ ] County [ X ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
LOCAL: | FY 2019 | FY 2020 | FY 2021 | FY 2022 |
Revenue | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease |
Expenditures | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
METHODOLOGY:
This bill changes the interest rates on late and delinquent property tax payments from a fixed rate of 12 percent for pre-lien payments and 18 percent for post lien payments, to the annual underpayment rate determined by the Commissioner of Revenue Administration, based on the rate specified in the Internal Revenue Code, pursuant to RSA 21-J:28, II.
The New Hampshire Municipal Association states the underpayment rate for 2018 is 6 percent. Using the data from the NH Public Finance Consortium website (www.nhpfc.org account 3190) revenue from interest and penalties on delinquent taxes in 2015 was reported by municipalities as approximately $26,144,339. The Association assumes this report includes primarily interest. Assuming the amount of delinquent taxes and the timing on the payment of those taxes remains constant for future years based on the reported figure from 2015, the amount of interest collected on delinquent property taxes on an annual basis would be reduced to approximately half of the amount generated in 2015, or approximately $13,000,000. The Association assumes the current interest rates of 12 percent and 18 percent encourages timely payments of property taxes. Reducing these disincentives for non-payment may increase the incidence of non-payments, thereby further decreasing local revenues and increasing local collection costs.
The Department of Revenue Administration reports that over the prior 10 year period, the interest rate calculated by the Commissioner pursuant to RSA 21-J:28, II has ranged from a high of 10 percent to a low of 5 percent. Therefore the DRA assumes tying the interest rate applicable to unpaid property taxes to the interest rate calculated pursuant to RSA 21-J:28, II will result in a decrease in the interest rate applicable to unpaid property taxes. The Department assumes the current interest rates of 12 percent and 18 percent encourages timely payments of property taxes. The Department assumes reducing these disincentives for non-payment may increase the incidence of non-payments, thereby further decreasing local revenues and increasing local collection costs. Detailed information on local property tax defaults or interest collected is not available, and abatement at the local level by selectmen and assessors is also not accounted for in determining the exact fiscal impact. Therefore the fiscal impact of the legislation is indeterminable.
AGENCIES CONTACTED:
New Hampshire Municipal Association and Department of Revenue Administration