HP0503, LD 682, item 1, An Act To Provide Seniors and Certain Persons with Disabilities Assistance with Property Taxes through the Deferral of Those Taxes

An Act To Provide Seniors and Certain Persons with Disabilities Assistance with Property Taxes through the Deferral of Those Taxes

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. Deferral of certain homestead property taxes. Beginning in 2021 and each year thereafter, by the dollar amounts of the maximum income limitation for deferral of homestead property taxes under section 6251, subsection 1, paragraph B and section 6253, subsection 1, paragraph B, 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, 2020.

Sec. 3. 36 MRSA §6250, sub-§3-A is enacted to read:

3-A. Liquid asset. "Liquid asset" means something of value available to an individual that can be converted to cash in 3 months or less and includes:

A. Bank accounts;

B. Certificates of deposit;

C. Money market and mutual funds;

D. Life insurance policies;

E. Stocks and bonds;

F. Lump-sum payments and inheritances; and

G. Funds from a home equity conversion mortgage that are in the individual's possession whether they are cash or have been converted to another form.

Sec. 4. 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 is unable to continue 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 . ; and

C. The individual has liquid assets of less than $50,000 or, in the case of 2 or more individuals filing a claim jointly, all the individuals together have liquid assets of less than $75,000.

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. 5. 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. 6. 36 MRSA §6252, sub-§4 is enacted to read:

4. No duplicate deferral. The taxpayer claiming the tax deferral is not receiving a deferral of taxes under chapter 908-A for the same property.

Sec. 7. 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, in the case of 2 or more individuals claiming the deferral jointly , of the individuals, 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. 8. 36 MRSA §6255, as enacted by PL 1989, c. 534, Pt. C, §1, is amended to read:

§ 6255. Listing of tax-deferred property

1. Tax-deferred property list. If eligibility for deferral of homestead property is established as provided in this chapter, the bureau shall notify the municipal assessor and the municipal assessor shall show on the current ad valorem assessment and tax roll which property is tax-deferred property by an entry clearly designating that property as tax-deferred property.

2. Tax statement. When requested by the bureau, the municipal tax collector shall send to the bureau as soon as the taxes are extended upon the roll the tax statement for each tax-deferred property.

3. Interest. Interest shall accrue accrues annually on the actual amount of taxes advanced to the municipality for the tax-deferred property at the a rate of 6% per annum that equals the highest prime rate as published in the Wall Street Journal on the first day of September of the preceding calendar year or, if the first day of September falls on a weekend or holiday, on the next succeeding business day, rounded up to the next whole percent and reduced by one percentage point.

Sec. 9. 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. 10. 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 , or the physical disability requirement of section 6251, 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 or meets the physical disability requirement of section 6251, subsection 1, paragraph A 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. 11. 36 MRSA §6267, as enacted by PL 1993, c. 707, Pt. G, §10, is repealed.

Sec. 12. 36 MRSA §6271, sub-§2, ¶¶B and C, as enacted by PL 2009, c. 489, §5, are amended to read:

B. The taxpayer is an owner of the eligible homestead, is at least 70 years of age on April 1st of the first year of eligibility and occupies the eligible homestead; and

C. The household income of the taxpayer does not exceed 300% of the federal poverty level . ; and

Sec. 13. 36 MRSA §6271, sub-§2, ¶D is enacted to read:

D. The taxpayer claiming the tax deferral is not receiving a deferral of taxes under chapter 908 for the same property.

Sec. 14. Application. This Act applies to property taxes based on the status of property on or after April 1, 2020.

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 is unable to continue employment due to disability and to surviving spouses who are at least 60 years of age or who are unable to continue employment due to disability and provides that income must be less than $40,000. This income limit is indexed for inflation in 2021 and annually thereafter. The bill also changes the rate of accrual of interest on deferred property taxes from 6% to the prime rate published in the Wall Street Journal rounded up to the next whole percent minus one percentage point. The bill adds a maximum liquid asset standard for eligibility of property owners and provides that property may not be subject to deferral under both the state deferral program and a municipal deferral program.

HP0503 LD 682	Session - 129th Maine Legislature		LR 692 Item 1
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