HB913: establishing a senior citizen property tax postponement program.

HB 913-FN-A – AS INTRODUCED

2007 SESSION

07-0280

10/03

HOUSE BILL 913-FN-A

AN ACT establishing a senior citizen property tax postponement program.

SPONSORS: Rep. Rowe, Hills 6

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes a program administered by the New Hampshire housing finance authority to pay the property taxes on the residences of income-qualified persons over 65 years of age. The housing finance authority shall have a lien for the amount of property taxes paid and shall receive reimbursement when the property is sold, when the person no longer qualifies, or when the person dies. The housing finance authority funds the program by proceeds from the issuance of bonds and notes.

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-0280

10/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT establishing a senior citizen property tax postponement program.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Subdivision; Statewide Elderly Property Tax Postponement Program. Amend RSA 204-C by inserting after section 86 the following new subdivision:

Statewide Elderly Property Tax Postponement Program

204-C:87 Purpose. The purpose of this subdivision is to assist qualified elderly residential property owners by providing property tax payments by the authority with reimbursement to the authority postponed until the sale or transfer of the property, or upon the death of the homeowner.

204-C:88 Program Established. There is hereby established a statewide elderly property tax postponement program to be administered by the authority which shall determine qualified applicants and make payment to the appropriate local tax collector of annual property tax payments under the program. Each participant’s annual property tax payment under the program shall not exceed $5,000. The total amount of the property tax payment made on account of each eligible property, funded by proceeds from bonds issued by the authority, shall be reimbursed as provided in this subdivision. The authority shall have a lien to the extent of the amount of property tax postponement payments made on behalf of a qualified participant for the residential property.

204-C:89 Applicants for Program; Qualifications.

I. The program in this subdivision shall be available statewide to persons meeting the following qualifications:

(a) The person is at least 65 years old, has owned the residence for at least 5 consecutive years, and is living in the residence.

(b) The annual property tax bill for the residential property of the applicant is greater than 10 percent of the applicant’s qualifying income in the calendar year preceding April 1 of the year for which postponement shall apply. Qualifying income shall be determined by deducting from adjusted gross income reported to the Internal Revenue Service any amount received under the federal Social Security Act.

II. For purposes of this subdivision:

(a) “Residence” or “residential property” means the housing unit, and related structures such as an unattached garage or woodshed, which is the person’s principal home, and which the person in good faith regards as home to the exclusion of any other places where the person may temporarily live. “Residence” or “residential property” shall exclude attached dwelling units and unattached structures used or intended for commercial or other nonresidential purposes.

(b) Ownership requirements for a residence shall be that the property is:

(1) Owned by the resident;

(2) Owned by a resident jointly or in common with the resident’s spouse, either of whom meets the age requirement for the program;

(3) Owned by a resident jointly or in common with a person not the resident’s spouse, if the resident meets the applicable age requirement for the program; or

(4) Owned by a resident, or the resident’s spouse, either of whom meets the age requirement for the program, and when they have been married to each other for at least 5 consecutive years.

204-C:90 Participation; Procedure.

I. No person shall be entitled to participation in the property tax postponement program under this subdivision unless the person has filed a application therefor, signed under penalty of perjury, on a form approved and provided by the authority, showing that the applicant is the true and lawful owner of the property on which the postponement is claimed and that the applicant is duly qualified at the time of application. The filing of the application shall be sufficient for said persons to continue in the program on an annual basis so long as the applicant does not change residence; provided, however, that the authority may require an annual application for the tax postponement under this subdivision. The form shall include the following and such other information deemed necessary by the authority:

(a) Instructions on completing and filing the form.

(b) Sections for information concerning the applicant, the property for which the relief is sought, and other properties owned by the person applying.

(c) A place for the applicant's signature with a certification by the person applying that the application has a good faith basis and the facts in the application are true.

II. When the authority approves the application or has a continuing authority for participation, a payment in the amount of taxes, up to $5,000 a year, for which the participant is eligible shall be mailed to the tax collector for the municipality in which the residence of the participant is located.

III. All persons participating in the program shall pay an annual interest charge on the sums accrued by their participation in the program, as determined by the authority, and an annual fee determined by the authority designed to offset the administrative costs of the authority.

IV. The authority shall file notice of each tax postponement paid, within 30 days, with the registry of deeds of the county in which the property is located to perfect it.

V. The authority shall maintain a record of all persons who have received postponement amounts pursuant to this subdivision. Such record shall include the name and address of the participants, and any other information deemed necessary by the authority for administration purposes.

204-C:91 Rulemaking. The authority shall adopt rules relative to:

I. Determination of eligibility for participants under this subdivision.

II. Application procedures and forms, including specific information on the residential property and local government information for tax payments.

III. Interest rates and a schedule of fees for program participants.

IV. Procedures for repayment under this subdivision.

V. The interpretation, construction, and uniform observance and enforcement of the statewide elderly property tax postponement program.

VI. Any other matter necessary to the administration of this subdivision.

204-C:92 Funding; Bonds; Authorization. The funding for the property tax payments made to local tax collectors under the program shall be from proceeds of bonds or notes of the state issued pursuant to this chapter, in such amounts as may be requested from time to time by the authority to enable it to perform all obligations punctually and in accordance with their terms. The authority shall request advances against bonds or notes from time to time as additional amounts are required for such purpose. The treasurer shall, subject to the approval of the governor and council, issue full faith and credit bonds of the state from time to time in amounts equal to advances made under this subdivision, and borrow in anticipation of the proceeds of such bonds. The authority may establish a bond reserve fund under RSA 204-C:40 for the purposes of this subdivision, and, as provided in the powers of the authority under RSA 204-C:8, may do any and all things necessary or convenient to carry out the purpose of implementing the funding for this subdivision.

204-C:93 Liens; Repayment.

I. All amounts postponed pursuant to this chapter shall be due if any of the following occurs:

(a) The participant ceases to occupy the residence, or sells or otherwise disposes of the residential property.

(b) The participant dies. However, if the surviving spouse continues to occupy the residence, then the postponed amounts shall not be due unless such surviving spouse dies, ceases to occupy the residence, or sells or otherwise transfers the residential property. If a surviving spouse becomes eligible to postpone property taxes pursuant to this subdivision, any postponement payments shall be added to the postponement amounts paid on behalf of the deceased spouse.

(c) Participation in the property tax postponement program was erroneously allowed because eligibility requirements were not met.

II. When the participant in the program dies, the heirs, heirs-at-law, assignee, or devisee shall have first priority to redeem the estate by paying in full the payments made plus any interest or other charges due. If the heirs, heirs-at-law, assignees, or devisees do not redeem the property within 9 months of the date of death of the property owner, the authority may collect it and shall have the same rights and remedies in relation thereto as provided in RSA 76:13 and RSA 80. Prior to holding a tax sale or executing a priority tax lien under RSA 80:59, the authority shall, at least 30 days prior to such tax sale or tax lien execution, send notice by certified or registered mail, to the last known post office address of the current owner, if known, or to the last known address of the deceased taxpayer, and to all mortgagees from whom permission has been sought. Any person with a legal interest in the property may redeem it, either prior to the tax sale or tax lien execution, or subsequently as set forth in RSA 80:32 or RSA 80:69.

III. The authority shall have all powers granted under this chapter for the payment, security, enforcement, and suit concerning liens created under this subdivision.

2 Effective Date. This act shall take effect July 1, 2007.

LBAO

07-0280

Revised 02/09/07

HB 913 FISCAL NOTE

AN ACT establishing a senior citizen property tax postponement program.

FISCAL IMPACT:

The Treasury Department and the New Hampshire Housing Finance Authority state this bill will increase state expenditures by an indeterminable amount in FY 2008 and each year thereafter. There would be no fiscal impact on county and local expenditures or state, county, and local revenue.

METHODOLOGY:

The Treasury Department states this bill will establish a senior citizen property tax postponement program. The Department cannot determine the fiscal impact of this bill because they cannot estimate the number of tax payments nor the amounts of the payments up to the $5,000 annual ceiling that may be granted to qualified taxpayers. Additionally, the Department states the increase in state expenditures related to the bond provisions of this bill is indeterminable. The Department determined taxable bonds, rather than state tax-exempt bonds, would be issued since this program would be utilized to make loans to private taxable entities. The Department states the debt expense is higher for a taxable bond, but the amount is indeterminable.

The New Hampshire Housing Finance Authority states this bill will result in increased administrative costs and additional staffing by an indeterminable amount. The Authority states based on the 2005 census estimate there are approximately 74,000 households in the state with at least one member 65 years of age or older. The Authority also states no reliable income data is available for these households, therefore, it is impossible to estimate how many households would be eligible for the program or how many households would participate in the program.

The bill establishes that any administrative costs associated with program implementation be recovered through fees charged to program participants and should not have any impact on state and local expenditures. The Authority assumes there may be significant fiscal impacts on the state related to the unlimited general obligation bond issuance authorized by the bill but is not able to comment on the impact.