2015 -- H 6246

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LC002763

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION - PROPERTY SUBJECT TO TAXATION - NORTH

SMITHFIELD

     

     Introduced By: Representative Brian C. Newberry

     Date Introduced: May 27, 2015

     Referred To: House Municipal Government

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-3-16.2 of the General Laws in Chapter 44-3 entitled "Property

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Subject to Taxation" is hereby amended to read as follows:

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     44-3-16.2. North Smithfield -- Tax stabilization for certain persons age sixty-five

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(65) and over. -- (a) Definitions:

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      (1) "Qualified senior" for the purpose of this section means any person who shall satisfy

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the criteria in subsection (A)(i) or (ii) or (iii); and all of the criteria of subsections (B) -- (J)

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inclusive:

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      (A) (i) who is age sixty-five (65) or more if single or widowed;

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      (ii) who, if married, at least one taxpayer who has attained age sixty-five (65) as long as

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the taxpayers' spouse is at least fifty (50) years of age;

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      (iii) who, if widowed, over age fifty (50) whose spouse was at least age sixty-five (65)

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prior to death and either spouse was a participant under this ordinance prior to death;

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      (B) whose home is a single family home (condominium ownership not eligible);

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      (C) whose North Smithfield home is the taxpayer's principle principal residence and that

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of the spouse (if living);

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      (D) who is a resident of the State of Rhode Island for income tax purposes, as is the

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spouse (if living);

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      (E) who is not a registered voter of any other city, town or political subdivision of Rhode

 

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Island or any other state, nor is the spouse (if living);

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      (F) who has resided in the principle principal residence for the past seven (7) years, as

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has the spouse (if living);

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      (G) whose real estate tax previously billed is not delinquent by more than four (4)

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quarters;

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      (H) who would otherwise qualify but has been forced to relocate residence through no

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fault of the taxpayer (e.g., in cases of fire, natural disaster or taking of property by eminent

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domain by a state or local government);

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      (I) whose real estate tax bill is more than five percent (5%) of the total income of the

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taxpayer, or, if living, of both spouses. "Total income" means the total of adjusted gross income

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per US individual income tax return, Form 1040, 1040-A (or the like) plus non-taxable income

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such as non-taxed social security benefits, welfare benefits, child support receipts, municipal

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bond interest receipts and other non-taxable items of income;

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      (J) who completes the application process and who attests that the individual meets, or, if

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living, both spouses meet all of the qualifications as outlined above.

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      (2) "Frozen Deferred Yearly Tax" for the purpose of this section means the amounts

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otherwise due for the assessment date of the year in which the taxpayer turned age sixty-four

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(64), or the year of the date of first application to the program whichever is later in time, and the

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tax assessed the following July.

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      (3) "Deferred Amount" for the purpose of this section means as the difference between

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the frozen yearly tax and the amount of tax that would otherwise be due and payable if the

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applicant did not qualify under this program.

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      (4) "Disqualifying Event" for the purpose of this section means to include any and all of

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the following:

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      (A) Sale of the property;

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      (B) Transfer of the property to a family member without life tenancy;

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      (C) The point in time when the property ceases to be the taxpayer's principle residence;

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      (D) Written request by the applicant to be removed from the program; or

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      (E) Any property whose square footage living space is increased since application and

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acceptance under this ordinance.

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      (b) Freeze on rate and valuation, and deferral Deferral of tax:

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      (1) The town council of the town of North Smithfield may, by ordinance, establish a

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freeze on the rate and valuation deferral of taxes on the principle principal residence of a qualified

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senior located in the town of North Smithfield.

 

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      (2) Upon proper application, approved by the administrator or his/her designee, the

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assessment and tax will be frozen at the frozen yearly tax deferred. The deferred amount will be

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deferred, without the accumulation of interest, until the occurrence of a disqualifying event.

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      (3) A deferral under this ordinance shall not be disallowed if the owner applicant has

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only a life estate in the property or if the property is in the name of a parent or one or more

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children or in a trust for the benefit of the otherwise qualified resident and the owners submit an

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affidavit that the qualified resident is the principle owner or present beneficiary and title is held in

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that manner for estate planning purposes only.

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      (4) A deferral is not allowed for any improvement for outbuildings such as garages or

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storage sheds, attached or not, to the principle residence once application and acceptance into the

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tax freeze program occurs.

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      (c) Application Process:

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      (1) The taxpayer shall initially apply for eligibility in the tax stabilization program

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between the dates of January 1 and March 31, for taxes assessed the following July of that year.

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After initial approval, the taxpayer must sign each year thereafter a statement attesting to the fact

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that the taxpayer and the spouse continue to qualify under the ordinance provisions.

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      (2) Participation is optional at the taxpayer's option.

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      (3) Failure to file subsequent statements of eligibility; or the occurrence of a

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disqualifying event of a temporary nature; or the elimination of a disqualifying event that no

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longer applies, shall require re-entry into the program and full reapplication and recertification,

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and shall nullify the freeze and any deferral for the tax year in which the disqualifying event

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occurred, and past deferred amounts shall be due under subsection (e). In such case, the frozen

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yearly tax shall be calculated as of the year of re-entry into the program.

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      (d) Recording of deferral; Lien:

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      (1) All properties subject to the tax freeze and deferral program will have the deferral

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noted on the deed and the deferral will be registered and recorded with the North Smithfield town

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clerk. Normal recording fees will apply.

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      (2) All taxes deferred shall constitute a lien on the real estate for which the deferment

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was granted until paid in accordance with the provisions ordinance.

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      (e) Payment of deferral:

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      (1) All deferrals must be paid in full within six (6) months of a disqualifying event in the

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case of a death of the legal owner of the property, at closing and conveyance in the event of a sale

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and within three (3) months of any other disqualifying event.

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      (2) Failure to report the disqualifying event, and/or to pay the deferral tax when due, will

 

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carry a maximum penalty of one hundred dollars ($100) per month, or portion thereof, and

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applicable interest on the currently assessed tax without regard to the freeze provisions contained

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herein. Interest will be assessed and due in the same manner as other past due tax receivables and

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will apply to all amounts previously deferred as well as current amounts due.

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      (f) Appeal: - Appeals of all decisions as to the application, administration, eligibility or

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other matter relating to this ordinance shall be made in writing to the North Smithfield town

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council.

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      (g) Severability: - If any provision of this chapter or the application thereof to any person

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or circumstances is held invalid, such invalidity shall not affect other provisions or applications of

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the chapter, which can be given effect without the invalid provision or application, and to this end

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the provisions of this chapter are declared to be severable.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - PROPERTY SUBJECT TO TAXATION - NORTH

SMITHFIELD

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     This act would convert the North Smithfield real estate tax freeze program for the elderly

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into a deferral program.

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     This act would take effect upon passage.

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