HP0386, LD 529, item 1, An Act To Provide Property Tax Deferral for Senior Citizens and People with Physical Disabilities

An Act To Provide Property Tax Deferral for Senior Citizens and People with Physical Disabilities

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 36 MRSA §5403, sub-§§7 and 8, as enacted by PL 2017, c. 474, Pt. B, §24, are amended to read:

7. Personal exemptions. Beginning in 2018 and each year thereafter, by the dollar amounts contained in section 5126-A, subsection 1, except that for the purposes of this subsection, notwithstanding section 5402, subsection 1-B, the "cost-of-living adjustment" is the Chained Consumer Price Index for the 12-month period ending June 30th of the preceding calendar year divided by the Chained Consumer Price Index for the 12-month period ending June 30, 2017; and

8. Personal exemption phase-out. Beginning in 2018 and each year thereafter, by the dollar amount of the applicable amounts specified in section 5126-A, subsection 2, paragraphs A, B and C, except that for the purposes of this subsection, notwithstanding section 5402, subsection 1-B, the "cost-of-living adjustment" is the Chained Consumer Price Index for the 12-month period ending June 30th of the preceding calendar year divided by the Chained Consumer Price Index for the 12-month period ending June 30, 2017 . ; and

Sec. 2. 36 MRSA §5403, sub-§9 is enacted to read:

9. Property tax deferral limit. Beginning in 2020 and each year thereafter, by the dollar amount of the income limitation amount in section 6251, subsection 1, paragraph B.

Sec. 3. 36 MRSA §6251, sub-§1, as repealed and replaced by PL 1993, c. 395, §31, is amended to read:

1. Filing claim. Subject to section 6252, an individual or 2 or more individuals jointly may elect to defer the property taxes on their homestead by filing a claim for deferral with the municipal assessor after January 1st but no later than April 1st of the first year in which deferral is claimed if:

A. The individual or each at least one individual, in the case of 2 or more individuals filing a claim jointly, is 65 years of age or older or retired from gainful employment by reason of physical disability on April 1st of the year in which the claim is filed; and

B. The individual or, in the case of 2 or more individuals filing a claim jointly, all the individuals together have household income, as defined in section 6201 5219-KK, subsection 7 1, paragraph D, of less than $32,000 $40,000 for the calendar year immediately preceding the calendar year in which the claim is filed.

The municipal assessor shall forward each claim filed under this subsection to the bureau within 30 days of receipt and the bureau shall determine if the property is eligible for deferral.

Claims from new applicants may not be filed pursuant to this chapter prior to January 1, 1994. For purposes of this section, "new applicants" means any person or persons that have not filed claims prior to April 1, 1991.

Sec. 4. 36 MRSA §6251, sub-§2, as enacted by PL 1989, c. 534, Pt. C, §1, is amended to read:

2. Property tax deferral. When the If a taxpayer elects is determined to be eligible to defer property taxes for any year by filing a claim for deferral under subsection 1, it shall have has the effect of:

A. Deferring the payment of the property taxes levied on the homestead for the municipal fiscal year beginning on or after April 1st of that year;

B. Continuing deferral of the payment by the taxpayer of any property taxes deferred under this chapter for previous years that have not become delinquent under section 6260; and

C. Continuing the deferral of the payment by the taxpayer of any future property taxes for as long as the provisions of section 6252 are met.

Sec. 5. 36 MRSA §6252, sub-§4 is enacted to read:

4. Maximum deferral. The total amount of taxes deferred under this chapter may not exceed 80% of the taxpayer's equity in the property.

Sec. 6. 36 MRSA §6253, as enacted by PL 1989, c. 534, Pt. C, §1, is amended to read:

§ 6253. Claim forms; contents

1. Administration. A taxpayer's claim for deferral under this chapter shall must be in writing on a form supplied by the bureau and shall must:

A. Describe the homestead;

B. Recite facts Provide information establishing the eligibility for the deferral under the provisions of this chapter, including facts that establish information that establishes that the household income , as defined in section 6201 5219-KK, subsection 7 1, paragraph D, of the individual, or , of all the individuals together in the case of 2 or more individuals claiming the deferral jointly, was less than $32,000 $40,000 for the calendar year immediately preceding the calendar year in which the claim is filed; and

C. Have attached Contain any documentary proof information required by the bureau to show that the requirements of section 6252 have been met.

2. Statement verification. There shall be annexed to the The claim must contain a statement verified by a written declaration of the applicant making the claim to the effect that the statements contained in the claim are true.

Sec. 7. 36 MRSA §6261, sub-§1, ¶A, as enacted by PL 1989, c. 534, Pt. C, §1, is amended to read:

A. The spouse of the taxpayer is or will be 65 60 years of age or older not later than 6 months from the day the circumstance listed in section 6259, subsections 1 to 3 occurs; and

Sec. 8. 36 MRSA §6261, sub-§2, as enacted by PL 1989, c. 534, Pt. C, §1, is amended to read:

2. Continuation of deferral by spouse. A spouse who does not meet the age requirements of subsection 1, paragraph A, but is otherwise qualified to continue the property in its tax-deferred status under subsection 1 may continue the deferral of property taxes deferred for previous years by filing a claim within the time and in the manner provided under section 6251. If a spouse eligible for and continuing the deferral of taxes previously deferred under this subsection becomes 65 60 years of age prior to April 1st of any year, the spouse may elect to continue the deferral of previous years' taxes deferred under this subsection and may elect to defer the current assessment year's taxes on the homestead by filing a claim within the time and in the manner provided under section 6251. Thereafter, payment of the taxes levied on the homestead and deferred under this subsection and payment of taxes levied on the homestead in the current assessment year and in future years may be deferred in the manner provided in and subject to this chapter.

Sec. 9. 36 MRSA §6267, as enacted by PL 1993, c. 707, Pt. G, §10, is repealed.

Sec. 10. 36 MRSA §6268 is enacted to read:

§ 6268. Property Tax Deferral Revolving Account; sources; uses

1. Revolving account. This section establishes in the State Treasury the Property Tax Deferral Revolving Account, referred to in this section as "the deferral account," to be used by the bureau for the purpose of making payments to municipal tax collectors of property taxes deferred for tax years beginning on or after April 1, 2020, as required by section 6257.

2. Finance Authority of Maine; loan. The Finance Authority of Maine shall establish a loan program to ensure the availability of sufficient funds to cover the cost of reimbursement to municipalities under section 6257, subsection 1. The Treasurer of State shall notify the Finance Authority of Maine when the Treasurer of State anticipates that funds in the deferral account are not sufficient to cover anticipated municipal reimbursement claims. The Finance Authority of Maine shall transfer sufficient funds from the loan program to the deferral account to ensure that the funds in the deferral account are sufficient to cover anticipated claims.

3. Advancement of funds. If there are insufficient funds in the deferral account necessary to make payments under subsection 1 following transfers by the Finance Authority of Maine under subsection 2, the Treasurer of State shall advance funds to the bureau from time to time as necessary as an appropriation from the General Fund.

4. Payments credited. All sums of money received by the bureau under this chapter as repayments of deferred property taxes, including the interest accrued under section 6255, subsection 3, must, upon receipt, be credited to the deferral account and must be available for the purposes of subsection 1.

5. Appropriation request. If, following transfers by the Finance Authority of Maine under subsection 2, there are insufficient funds in the deferral account to make the payments required by subsection 1, the assessor shall request an appropriation from the General Fund that together with the money in the deferral account will provide an amount sufficient to make the required payments.

6. General Fund reimbursement. When the bureau determines that sufficient funds are available in the deferral account, the bureau shall repay to the Finance Authority of Maine loan program and to the General Fund the amounts provided to the deferral account under subsections 2 and 3, plus accrued interest.

SUMMARY

This bill reinstates the State's property tax deferral program, which was in effect for applications filed before April 1, 1991. The bill modifies the program to include households with at least one individual who is 65 years of age or older or who retired from gainful employment due to physical disability and to surviving spouses who are at least 60 years of age and provides that household income must be less than $40,000. This limit is indexed for inflation in 2020 and annually thereafter.

This bill limits the total amount of property taxes that a taxpayer may defer to 80% of the taxpayer's equity in the property and requires the Finance Authority of Maine to establish a loan program to ensure adequate funding of reimbursements to municipalities.

HP0386 LD 529	Session - 129th Maine Legislature		LR 133 Item 1
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