2003 SESSION

03-0157

09/10

SENATE BILL SB 12-FN-A-LOCAL

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes a property tax relief program for low income homeowners.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03-0157

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

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

1 New Subdivision; Low Income Homeowners Property Tax Relief. Amend RSA 198 by inserting after section 61 the following new subdivision:

Low Income Homeowners Property Tax Relief

198:62 Definitions. In this subdivision:

I. "Commissioner" means the commissioner of the department of revenue administration.

II. "Homestead" means the dwelling owned by a claimant or, in the case of a multi-unit dwelling, the portion of the dwelling which is owned and used as the claimant's principal place of residence and the claimant's domicile for purposes of RSA 654:1. "Homestead" shall not include land and buildings taxed under RSA 79-A or land and buildings or the portion of land and buildings rented or used for commercial or industrial purposes. In this paragraph, the term "owned" includes:

(a) A vendee in possession under a land contract;

(b) One or more joint tenants or tenants in common; or

(c) A person who has equitable title, or the beneficial interest for life in the homestead.

III. "Household income" means the sum of the adjusted gross income for federal income tax purposes of the claimant and any member of the claimant's household who resides in the homestead for which a claim is made. "Household income" shall also include all income of any trust through which the claimant holds equitable title, or the beneficial interest for life, in the homestead.

IV. "New Hampshire household" means any person filing a federal income tax return as head of household or 2 or more adults who jointly share the benefit of the homestead. "New Hampshire household" shall not include those adults who share the homestead under a landlord-tenant relationship.

198:63 Low Income Homeowners Property Tax Relief

I. Pursuant to the provisions of this subdivision, eligible claimants shall be granted tax relief following the effective date of this act.

II. Residents shall apply to the department of revenue administration for tax relief under this subdivision.

III. An eligible claimant is a person who:

(a) Owns a homestead or interest in a homestead subject to the education property tax;

(b) Resides in such homestead at the time of application for relief under this subdivision, except such persons as are on active duty in the United States armed forces or are temporarily away from such homestead but maintain the homestead as a primary domicile; and

(c) Realizes total household income of $40,000 or less.

IV. All or a portion of an eligible claimant's education property taxes, exclusive of municipal and county taxes, shall be rebated as follows:

(a) Deduct the municipal, county, and local education property tax rate from the claimant's total annual property tax rate;

(b) Multiply the net property tax rate computed in subparagraph (a) by the following percentage as applicable to determine the amount of the tax relief. For a claimant, whether single, married or head of household, with total household income of:

(1) Less than $20,000, 100 percent of the net tax rate;

(2) $20,000 but less than $22,000, 95 percent of the net tax rate;

(3) $22,000 but less than $24,000, 90 percent of the net tax rate;

(4) $24,000 but less than $26,000, 85 percent of the net tax rate;

(5) $26,000 but less than $28,000, 80 percent of the net tax rate;

(6) $28,000 but less than $30,000, 75 percent of the net tax rate;

(7) $30,000 but less than $32,000, 70 percent of the net tax rate;

(8) $32,000 but less than $34,000, 65 percent of the net tax rate;

(9) $34,000 but less than $36,000, 60 percent of the net tax rate;

(10) $36,000 but less than $38,000, 55 percent of the net tax rate; or

(11) $38,000 but less than or equal to $40,000, 50 percent of the net rate.

(c) Multiply the rate computed in subparagraph (b) by the local assessed valuation of the homestead from the claimant's current property tax bill;

(d) Multiply the rate computed in subparagraph (b) by the value of a homestead with an equalized value of $150,000 in the claimant's municipality for the current tax year;

(e) The total amount of tax relief allowable in any year shall be the amount computed in subparagraph (c) or (d), whichever is the lesser amount.

V. If a homestead is owned by 2 or more persons as joint tenants or tenants in common, and one or more of such joint owners do not principally reside at such homestead, tax relief applies to the proportionate share of the homestead value that reflects the ownership percentage of the claimant. Only one claim may be filed for a single homestead.

VI. Claims for tax relief filed with the department of revenue administration shall be filed within 60 days of the due date of the taxes.

VII. Each claim shall be accompanied by a copy of the claimant's federal income tax return filed by the claimant for the immediately prior tax period. Claimants who were not required to file a federal tax return for the immediately prior tax period may submit an affidavit to such effect in lieu of a tax return which document shall include the claimant's social security number. A claimant who asserts ownership in a homestead because he or she holds equitable title, or the beneficial interest for life, in the homestead shall also submit a copy of the document creating such interest and a copy of the federal tax return, if any, for the immediately prior tax period, of the trust holding legal title to the homestead. Any documents submitted shall be considered confidential, and protected under RSA 21-J:14.

VIII. The provisions of RSA 359-C shall not apply to the documents required to be submitted under this section.

198:64 Rulemaking; Forms; Notice.

I. The commissioner shall adopt emergency rules under RSA 541-A:18 relative to the administration of the provisions of this subdivision. The commissioner shall also adopt such rules pursuant to RSA 541-A subsequent to the emergency rules.

II. The commissioner shall approve and provide forms relative to the administration of this subdivision.

III. Claim forms shall include the following:

(a) Instructions on completing and filing the form;

(b) Sections for information concerning the claimant, the claimant's household, the property for which relief is sought, and such other information as is reasonably necessary to determine the accuracy of the claim;

(c) Instructions on appeal procedure and time limits relative to such appeals; and

(d) A place for the claimant's signature with a certification by the claimant that the claim is made in good faith and that the facts contained in the claim are true.

IV. The commissioner shall publicize notice of the property tax relief provisions in a suitable manner.

198:65 Penalties; Assessment of Erroneous Claims.

I. Any person who files a claim under this subdivision with fraudulent intent and any person who assisted in the preparation or filing of the claim or supplied information upon which the claim was prepared shall be guilty of a misdemeanor.

II. The commissioner may assess and collect the amount of any sums granted for hardship relief relative to a fraudulent or erroneously paid claim for tax relief including interest provided under RSA 21-J:28 and an additional penalty of 25 percent for the erroneous amount of such claim or an additional penalty of the greater of 25 percent or $1,000 for a fraudulent claim.

198:66 Appeals.

I. Whenever the commissioner refuses to grant a claimant a tax relief claim, the claimant may appeal in writing within 30 days of notice of such refusal to the board of tax and land appeals.

II. When a taxpayer appeals the commissioner's refusal of a claim to the board of tax and land appeals, the board may reverse or affirm, wholly or partly, or may modify the decision brought up for review when there is an error of law or when the board finds the commissioner's action to be arbitrary or unreasonable.

198:67 Refund of Tax Claims. The department of revenue administration shall review a claim for relief filed with it and, if such claim is determined to be valid, shall certify such amount to the state treasurer within 90 days. The state treasurer shall pay the claim to the claimant from funds in the education trust fund. The department shall notify a claimant whose claim is rejected in whole or in part of such determination within 90 days of the department's receipt of the claim and all required documentation.

2 Department of Administrative Services; Purchase of Supplies; Exemptions. Amend RSA 21-I:18, I(l) to read as follows:

(l) Purchases of services from private contractors by the department of revenue administration with respect to the administration of low [and moderate] income homeowners property tax relief claims.

3 Repeal. RSA 198:56 - 198:61, relative to low and moderate income homeowners property tax relief, are repealed.

4 Effective Date. This act shall take effect July 1, 2003.

LBAO

03-0157

12/13/02

SB 12-FN-A-LOCAL - FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY: