2006 -- S 2937

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LC02759

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2006

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A N A C T

RELATING TO PROPERTY SUBJECT TO TAXATION

     Introduced By: Senator C Levesque

     Date Introduced: March 15, 2006

     Referred To: Senate Commerce, Housing & Municipal Government

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-3 of the General Laws entitled "Property Subject to Taxation" is

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hereby amended by adding thereto the following section:

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     44-3-16.1. Portsmouth -- Tax deferral for certain persons age sixty-five (65) and

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for persons with a disability. – The town council of the town of Portsmouth may, by ordinance,

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provide a tax deferral program as follows:

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     (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 (i)(A) or (B) or (C); and all of the criteria of subsections (ii) through (x)

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inclusive:

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

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

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     (iii) whose Portsmouth home is the taxpayer's principle residence and that of the spouse

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(if living);

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     (iv) 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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     (v) 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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     (vi) who has resided in the principle residence for the past seven (7) years, as has the

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spouse (if living);

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

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quarters;

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     (viii) 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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     (ix) whose real estate tax bill is more than twenty-five percent (25%) of the total income

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

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

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

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

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     (x) 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) "Person with a disability" for the purpose of this section means a person with a

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disability as defined in Rhode Island General Laws subsection 42-87-1(7)(i) and all of the criteria

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of subsection (i) through (ix) include:

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

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     (ii) whose Portsmouth home is the taxpayer's principle residence and that of the spouse

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(if living);

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     (iii) 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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     (iv) 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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     (v) who has resided in the principle residence for the past seven (7) years, as has the

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spouse (if living);

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

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quarters;

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     (vii) who would otherwise qualify by 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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     (viii) 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 U.S. 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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     (ix) who completes the application process and who attests that the individual meets, or,

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

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     (3) "Deferred Amount" for the purpose of this section means the amount of tax that

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would otherwise be due and payable if the 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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     (i) Sale of the property;

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

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

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

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     (v) 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)(1) Upon proper application, approved by the administrator or his/her designee, the

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deferred amount will be deferred, without the accumulation of interest, until the occurrence of a

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disqualifying event.

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

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

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in a trust for the benefit of the otherwise qualified resident and the owners submit an affidavit that

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

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for estate planning purposes only.

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     (3) 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 November 1 through December 31, for taxes assessed December 31 of that

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

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the fact 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 any deferral for the tax year in which the disqualifying event occurred, and past

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deferred amounts shall be due under subsection (e). In such case, the tax shall be calculated as of

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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 deferral program will have the deferral will be registered

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and recorded with the Portsmouth town 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 was

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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. Interest will be assessed and due in the same

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manner as other past due tax receivables and will apply to all amounts previously deferred as well

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as current amounts due.

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     (f) Appeal:

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     Appeals of all decisions as to the application, administration, eligibility or other matter

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relating to this ordinance shall be made in writing according to law.

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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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     (h) The purpose of this section is to enable the town of Portsmouth to provide tax

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stabilization for those residents with a disability or those residents over the age of sixty-five (65).

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The provisions of this section are in addition to, and not in lieu of the provisions of section 44-3-

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32.

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     SECTION 2. This act shall take effect upon passage.

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LC02759

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PROPERTY SUBJECT TO TAXATION

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     This act would provide tax deferral for qualified persons who are deemed disabled and

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for persons age sixty-five and over.

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     This act would take effect upon passage.

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LC02759

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