New Jersey-2024-A462-Introduced

An Act concerning the homestead property tax reimbursement application process and amending P.L.1997, c.348.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1997, c.348 (C.54:4-8.67) is amended to read as follows:

1. As used in this act:

"Base year" means, in the case of a person who is an eligible claimant on or before December 31, 1997, the tax year 1997; and in the case of a person who first becomes an eligible claimant after December 31, 1997, the tax year in which the person first becomes an eligible claimant. In the case of an eligible claimant who subsequently moves from the homestead for which the initial eligibility was established, the base year shall be the first full tax year during which the person resides in the new homestead. Provided however, a base year for an eligible claimant after such a move shall not apply to tax years commencing prior to January 1, 2009.

"Commissioner" means the Commissioner of Community Affairs.

["Director" means the Director of the Division of Taxation.]

"Condominium" means the form of real property ownership provided for under the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.).

"Cooperative" means a housing corporation or association which entitles the holder of a share or membership interest thereof to possess and occupy for dwelling purposes a house, apartment or other unit of housing owned or leased by the corporation or association, or to lease or purchase a unit of housing constructed or to be constructed by the corporation or association.

"Director" means the Director of the Division of Taxation.

"Disabled person" means an individual receiving monetary payments pursuant to Title II of the federal Social Security Act (42 U.S.C. s.401 et seq.) on December 31, 1998, or on December 31 in all or any part of the year for which a homestead property tax reimbursement under this act is claimed.

"Dwelling house" means any residential property assessed as real property which consists of not more than four units, of which not more than one may be used for commercial purposes, but shall not include a unit in a condominium, cooperative, horizontal property regime or mutual housing corporation.

"Eligible claimant" means a person who:

is 65 or more years of age, or who is a disabled person;

is an owner of a homestead, or the lessee of a site in a mobile home park on which site the applicant owns a manufactured or mobile home;

has an annual income of less than $17,918 in tax year 1998, less than $18,151 in tax year 1999, or less than $37,174 in tax year 200 0, if single, or, if married, whose annual income combined with that of the spouse is less than $21,970 in tax year 1998, less than $22,256 in tax year 1999, or less than $45,582 in tax year 2000, which income eligibility limits for single and married persons shall be subject to adjustments in tax years 2001 through 2006 pursuant to section 9 of P.L.1997, c.348 (C.54:4-8.68);

has an annual income of $60,000 or less in tax year 2007, $70,000 or less in tax year 2008, or $80,000 or less in tax year 2009, if single or married, which income eligibility limits shall be subject to adjustments in [subsequent] tax years 2010 through 2021 pursuant to section 9 of P.L.1997, c.348 (C.54:4-8.68);

for tax years beginning on or after January 1, 2022, has an annual gross income of $92,969 or less in tax year 2020, which gross income eligibility limit shall be subject to adjustments in subsequent tax years pursuant to section 9 of P.L.1997, c.348 (C.54:4-8.68);

as a renter or homeowner, has made a long-term contribution to the fabric, social structure and finances of one or more communities in this State, as demonstrated through the payment of property taxes directly, or through rent, on any homestead or rental unit used as a principal residence in this State for at least 10 consecutive years at least three of which as owner of the homestead for which a homestead property tax reimbursement is sought prior to the date that an initial application for a homestead property tax reimbursement is filed. A person who has been an eligible claimant for a previous tax year shall qualify as an eligible claimant beginning the second full tax year following a move to another homestead in New Jersey, despite not meeting the three-year minimum residency and ownership requirement required for initial claimants under this paragraph; provided that the person satisfies the income eligibility limits for the tax year. Provided however, eligibility beginning in a second full tax year after such a move shall not apply to tax years commencing prior to January 1, 2010.

"Gross income" means all New Jersey gross income required to be reported pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., other than income excludable from the gross income tax return, but before reduction thereof by any applicable exemptions, deductions, and credits received during the taxable year by the owner or residential shareholder in, or lessee, of, a homestead.

"Homestead" means:

a dwelling house and the land on which that dwelling house is located which constitutes the place of the eligible claimant's domicile and is owned and used by the eligible claimant as the eligible claimant's principal residence;

a site in a mobile home park equipped for the installation of manufactured or mobile homes, where these sites are under common ownership and control for the purpose of leasing each site to the owner of a manufactured or mobile home for the installation thereof and such site is used by the eligible claimant as the eligible claimant's principal residence;

a dwelling house situated on land owned by a person other than the eligible claimant which constitutes the place of the eligible claimant's domicile and is owned and used by the eligible claimant as the eligible claimant's principal residence;

a condominium unit or a unit in a horizontal property regime or a continuing care retirement community which constitutes the place of the eligible claimant's domicile and is owned and used by the eligible claimant as the eligible claimant's principal residence.

In addition to the generally accepted meaning of "owned" or "ownership," a homestead shall be deemed to be owned by a person if that person is a tenant for life or a tenant under a lease for 99 years or more, is entitled to and actually takes possession of the homestead under an executory contract for the sale thereof or under an agreement with a lending institution which holds title as security for a loan, or is a resident of a continuing care retirement community pursuant to a contract for continuing care for the life of that person which requires the resident to bear, separately from any other charges, the proportionate share of property taxes attributable to the unit that the resident occupies;

a unit in a cooperative or mutual housing corporation which constitutes the place of domicile of a residential shareholder or lessee therein, or of a lessee or shareholder who is not a residential shareholder therein, which is used by the eligible claimant as the eligible claimant's principal residence.

"Homestead property tax reimbursement" means payment of the difference between the amount of property tax or site fee constituting property tax due and paid in any year on any homestead, exclusive of improvements not included in the assessment on the real property for the base year, and the amount of property tax or site fee constituting property tax due and paid in the base year, when the amount paid in the base year is the lower amount; but such calculations shall be reduced by any current year property tax reductions or reductions in site fees constituting property taxes resulting from judgments entered by county boards of taxation or the State Tax Court.

"Horizontal property regime" means the form of real property ownership provided for under the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.).

"Manufactured home" or "mobile home" means a unit of housing which:

(1) Consists of one or more transportable sections which are substantially constructed off site and, if more than one section, are joined together on site;

(2) Is built on a permanent chassis;

(3) Is designed to be used, when connected to utilities, as a dwelling on a permanent or nonpermanent foundation; and

(4) Is manufactured in accordance with the standards promulgated for a manufactured home by the Secretary of the United States Department of Housing and Urban Development pursuant to the "National Manufactured Housing Construction and Safety Standards Act of 1974," Pub.L.93-383 (42 U.S.C. s.5401 et seq.) and the standards promulgated for a manufactured or mobile home by the commissioner pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.).

"Income" means as determined pursuant to P.L.1975, c.194 (C.30:4D-20 et seq.).

"Mobile home park" means a parcel of land, or two or more parcels of land, containing no fewer than 10 sites equipped for the installation of manufactured or mobile homes, where these sites are under common ownership and control for the purpose of leasing each site to the owner of a manufactured or mobile home for the installation thereof, and where the owner or owners provide services, which are provided by the municipality in which the park is located for property owners outside the park, which services may include but shall not be limited to:

(1) The construction and maintenance of streets;

(2) Lighting of streets and other common areas;

(3) Garbage removal;

(4) Snow removal; and

(5) Provisions for the drainage of surface water from home sites and common areas.

"Mutual housing corporation" means a corporation not-for-profit, incorporated under the laws of this State on a mutual or cooperative basis within the scope of section 607 of the Langham Act (National Defense Housing), Pub.L.849, (42 U.S.C. s.1521 et seq.), as amended, which acquired a National Defense Housing Project pursuant to that act.

["Income" means income as determined pursuant to P.L.1975, c.194 (C.30:4D-20 et seq.).]

"Principal residence" means a homestead actually and continually occupied by an eligible claimant as his or her permanent residence, as distinguished from a vacation home, property owned and rented or offered for rent by the claimant, and other secondary real property holdings.

"Property tax" means the general property tax due and paid as set forth in this section, and shall include the amount of property tax credit as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6), on a homestead, but does not include special assessments and interest and penalties for delinquent taxes. For the sole purpose of qualifying for a benefit under P.L.1997, c.348 (C.54:4-8.67 et seq.), property taxes paid by June 1 of the year following the year for which the benefit is claimed will be deemed to be timely paid.

"Site fee constituting property tax" means 18 percent of the annual site fee paid or payable to the owner of a mobile home park.

"Tax year" means the calendar year in which a homestead is assessed and the property tax is levied thereon and it means the calendar year in which income is received or accrued.

(cf: P.L.2018, c.11, s.11)

2. Section 9 of P.L.1997, c.348 (C.54:4-8.68) is amended to read as follows:

9. The gross income eligibility limits provided in the definition of "eligible claimant" under section 1 of P.L.1997, c.348 (C.54:4-8.67) shall increase by the amount of the maximum Social Security benefit cost of living increase for that year for single and married persons, respectively. The director shall adopt new gross income limits annually by notice or regulation.

(cf: P.L.1997, c.348, s.9)

3. Section 3 of P.L.1997, c.348 (C.54:4-8.70) is amended to read as follows:

3. An application for a homestead property tax reimbursement hereunder shall be filed with the director annually beginning [April 1 and ending October 31] January 1 and ending April 15 of the year following the year for which the claim is being made [and]. The application shall be submitted (1) as part of the eligible claimant's gross income tax return filed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or (2) on any other form, in any manner and at any time prior to any date the director shall prescribe if (a) the claimant is not required to file a gross income tax return or (b) the eligible claimant has filed an application for extension of time to file the claimant's gross income tax return. The application shall reflect the prerequisites for a homestead property tax reimbursement on December 31 of the tax year for which the claim is being made; provided, however, that the director may, by rule, designate a later date as the date by which the application shall be filed or waive the requirement for filing an annual application for any year or years subject to any limitations and conditions the director may deem appropriate. The application shall be on a form prescribed by the director and provided for the use of applicants hereunder. Each applicant making a claim for a homestead property tax reimbursement under this act shall provide, if required by the director, to the director a copy of his or her current year property tax bill or current year site fee bill on the homestead constituting that person's principal residence and a copy of his or her property tax bill for the base year or site fee bill for the base year on the same homestead, or other equivalent proof as permitted by the director. The director may require an eligible claimant to submit such additional information about the claimant's age, annual gross income, and property address as well as any other information deemed necessary by the director in order to approve or disapprove the eligible claimant's application. The director may inspect all records in the offices of the tax collector and tax assessor of a municipality with respect to applications and claims for a homestead property reimbursement.

It shall be the duty of every eligible claimant to inform the director of any change in his or her status or homestead which may affect his or her right to continuance of the homestead property tax reimbursement.

If an eligible claimant receives an additional homestead property tax reimbursement to which the claimant was not entitled or greater than the reimbursement to which the claimant was entitled, the director shall permit the claimant to enter into an installment payment agreement for a reasonable period of time that will enable the claimant to completely satisfy the amount of the reimbursement paid to which the claimant was not entitled. If the claimant does not enter into an installment payment agreement, the director may, in addition to all other available legal remedies, offset such amount against a gross income tax refund or amount due pursuant to P.L.1990, c.61.

(cf: P.L.2017, c.370)

4. This act shall take effect immediately and shall be operative as of January 1, 2023.

STATEMENT

This bill amends current law to make it easier for eligible claimants to file an application for the homestead property tax reimbursement program. This program is more commonly known as the "senior freeze."

In pertinent part, P.L.1997, c.348 limited eligibility for the homestead property tax reimbursement to senior citizens and disabled persons who were eligible for the program of pharmaceutical assistance to the aged and disabled (PAAD). A claimant's eligibility to receive a homestead property tax reimbursement was based, in part, on whether their income was within the limit used to determine eligibility for PAAD. This method of calculating income requires a claimant to file a separate application for the homestead property tax reimbursement which reports all source of income, including income they do not report on their New Jersey gross income tax return. This application process is often cumbersome and confusing for senior freeze applicants.

This bill provides that an applicant's gross income, as reported pursuant to the "New Jersey Gross Income Tax Act," would be used to determine their eligibility for a homestead property tax reimbursement. Using gross income to determine a claimant's eligibility for a homestead property tax reimbursement is intended to make the homestead property tax reimbursement process less stressful because claimants will not have to file a separate application to report their income and the Division of Taxation will be able to determine a claimant's eligibility by reviewing their New Jersey gross income tax return.

The bill also requires an eligible claimant to file a property tax reimbursement application with their New Jersey gross income tax return. The bill permits the Director of the Division of Taxation to establish alternate methods of submitting a property tax reimbursement application if an eligible claimant is not required to file a gross income tax return or if an eligible claimant is has filed an extension to file their gross income tax return. The bill also allows the Director of the Division of Taxation to require the submittal of additional information necessary to determine a claimant's eligibility to receive a homestead property tax reimbursement.

This bill takes effect immediately but would not be operative until January 1, 2023 in order provide the Division of Taxation time to update its processes for administering the homestead property tax reimbursement program.