New Jersey-2022-S1501-Introduced

An Act concerning the homestead property tax reimbursement program 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] P.L.1997, c.348 (C.54:4-8.67 et seq.):

"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] freeze benefit under [this act] P.L.1997, c.348 (C.54:4-8.67 et seq.) 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 2000, 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 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] freeze benefit is sought prior to the date that an initial application for a homestead property tax [reimbursement] freeze benefit 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.

"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"] freeze benefit" means payment to a municipality with respect to an eligible claimant's homestead or to an eligible claimant, as applicable, of the difference between the amount of property tax or site fee constituting property tax due and paid in any year on [any] that 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.).

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

"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 2 of P.L.1997, c.348 (C.54:4-8.69) is amended to read as follows:

2. Every eligible claimant shall be entitled to [reimbursement] a homestead property tax freeze benefit for each year subsequent to the base year and annually thereafter, on proper claim being made therefor to the director [, to a homestead property tax reimbursement]. The amount of the homestead property tax [reimbursement] freeze benefit shall not be reduced by the amount of the deductions taken by the eligible claimant pursuant to P.L.1963, c.171 (C.54:4-8.10 [to 54:4-8.23)] et seq.) and [P.L.1964, c.255 (C.54:4-8.40 to 54:4-8.45 et al.)] P.L.1963, c.172 (C.54:4-8.40 et seq.). The surviving spouse of a deceased resident of this State who during his or her life received a homestead property tax reimbursement or freeze benefit pursuant to P.L.1997, c.348 (C.54:4-8.67 et seq.) shall be entitled, so long as he or she remains a resident in the same homestead with respect to which the homestead property tax reimbursement or freeze benefit was granted, and so long as he or she is an eligible claimant, to the same homestead property tax [reimbursement] freeze benefit that the deceased resident would have been entitled to if that resident had survived, upon the same conditions, with respect to the same homestead.

(cf: P.L.1999, c.63, s.17)

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

3. a. An application for a homestead property tax [reimbursement] freeze benefit hereunder shall be filed with the director annually beginning April 1 and ending October 31 of the tax year following the year for which the claim is being made and shall reflect the prerequisites for a homestead property tax [reimbursement] freeze benefit 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 director shall, for good cause shown, extend the time of any applicant to file a claim for a homestead property tax freeze benefit for a reasonable period. In such case, the director shall process the application and pay the homestead property tax freeze benefit in accordance with the procedures established in the case of applications timely filed, except that the director may delay the date for payment of the credit or rebate for a reasonable period.

For the purposes of this subsection, in order to establish good cause to extend the time of any applicant to file a claim for a homestead property tax freeze benefit the applicant shall provide to the director either: (1) medical evidence, such as a doctor's certification, that the applicant was unable to file the claim by the date prescribed by the director because of illness or hospitalization, or (2) evidence that the applicant attempted to file a timely application. Except as may be established by medical evidence of inability to file a claim, good cause shall not be established due to an eligible claimant not having received an application from the director.

b. The application shall be on a form prescribed by the director and provided for the use of applicants hereunder. [Each] The director may require that each applicant making a claim for a homestead property tax [reimbursement] freeze benefit under [this act shall] P.L.1997, c.348 (C.54:4-8.67 et seq.) 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. In the case of an eligible claimant for a homestead property tax freeze benefit whose homestead is a unit in a cooperative, mutual housing corporation, or continuing care retirement community, the director may provide that the application shall include the name and address of the property and the amount of real property taxes attributed to the cooperative, mutual housing corporation, or continuing care retirement community unit, as shall be indicated in an official notice which shall be furnished by the cooperative, mutual housing corporation, or continuing care retirement community for the same year.

c. Upon approval of homestead property tax freeze benefit applications by the director, the director shall prepare lists of individuals entitled to credits, together with the respective amounts due each eligible claimant, and shall forward such lists to the State Treasurer, the Director of the Division of Budget and Accounting, and any other officials as the director deems appropriate on or before the earliest of the date or dates as may be convenient for the director to compile the lists. The director may inspect all records in the offices of the tax collector and tax assessor of a municipality with respect to applications, claims, and allowances for homestead property tax freeze benefits.

d. 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] freeze benefit.

e. If an eligible claimant receives an additional homestead property tax [reimbursement] freeze benefit to which the claimant was not entitled or greater than the [reimbursement] benefit 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] benefit 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, s.1)

4. Section 4 of P.L.1997, c.348 (C.54:4-8.71) is amended to read as follows:

4. a. The director shall administer the homestead property tax [reimbursement] freeze benefit program. [A payment for the homestead property tax reimbursement amount, as calculated by the director, shall be mailed to each person determined by the director to be an eligible claimant under this act on or before July 15, 1999 and July 15 annually thereafter, except that the payment of any homestead property tax reimbursement amount for an eligible claimant whose application is filed during the period May 1 through June 1 shall be mailed on or before September 1 annually. Provided further, however, that the payment of any homestead property tax reimbursement amount for an eligible claimant whose application is filed during a period after June 1 pursuant to an extended application deadline as may be designated by the director shall be mailed on or before such latter mailing date as the director may determine]

b. A homestead property tax freeze benefit allowed by the director for an eligible claimant, whose homestead is not a unit in a cooperative, mutual housing corporation, or continuing care retirement community, shall be paid by the State Treasurer, upon certification of the director and upon warrant of the Director of the Division of Budget and Accounting, through electronic funds transfers made by the director to the local property tax account maintained by the local tax collector for the homestead of the claimant as the claimant shall identify, in equal installments after the application for the benefit has been approved, at the dates and in the manner as the director shall determine to best coincide with the next following local property tax quarterly due dates of August 1 and November 1; provided, however, that a homestead property tax freeze benefit owing pursuant to this subsection shall be paid and distributed as a rebate if the director is unable to ensure that the benefit will be applied to the appropriate taxpayer. Notice of payments of credit installments shall be provided to the claimant and the appropriate local tax collector.

c. A homestead property tax freeze benefit allowed by the director for an eligible claimant, whose homestead is a unit in a cooperative, mutual housing corporation, or continuing care retirement community, shall be paid by the State Treasurer, upon certification of the director and upon warrant of the Director of the Division of Budget and Accounting, as a rebate distributed to the claimant after the application for the benefit has been approved, at the dates and in the manner as the director shall determine, on or before October 31.

d. All payments made pursuant to this section shall be appropriated from receipts in the Casino Revenue Fund.

(cf: P.L.2003, c.30, s.2)

5. Section 5 of P.L.1997, c.348 (C.54:4-8.72) is amended to read as follows:

5. a. When title to a homestead as to which a homestead property tax [reimbursement] freeze benefit is claimed is held by an eligible claimant and another or others, either as tenants in common or as joint tenants, the eligible claimant shall not be allowed a homestead property tax [reimbursement] freeze benefit in an amount in excess of his or her proportionate share of the taxes assessed against the homestead, which proportionate share, for the purposes of [this act] P.L.1997, c.348 (C.54:4-8.67 et seq.), shall be deemed to be equal to that of each of the other tenants, unless it is shown that the interests in question are not equal, in which event the eligible claimant's proportionate share shall be as shown. Nothing herein shall preclude more than one tenant, whether title be held in common or joint tenancy, from claiming a homestead property tax [reimbursement] freeze benefit from the taxes assessed against the property so held, but no more than the equivalent of one full homestead property tax [reimbursement] freeze benefit in regard to such homestead shall be allowed in any year. In any case in which the eligible claimants cannot agree as to the apportionment thereof, such homestead property tax [reimbursement] freeze benefit shall be apportioned between or among them in proportion to their interest. Property held by husband and wife, as tenants by the entirety, shall be deemed wholly owned by each tenant, but no more than one full homestead property tax [reimbursement] freeze benefit in regard to such homestead shall be allowed in any year. Right to claim a homestead property tax [reimbursement] freeze benefit hereunder shall extend to a homestead the title to which is held by a partnership, to the extent of the eligible claimant's interest as a partner therein, and by a guardian, trustee, committee, conservator or other fiduciary for any person who would otherwise be entitled to claim such homestead property tax [reimbursement] freeze benefit hereunder, but not to a homestead the title to which is held by a corporation; except that a residential shareholder in a cooperative or mutual housing corporation shall be entitled to claim a homestead property tax [reimbursement] freeze benefit if he or she is otherwise eligible to receive it, to the extent of the proportionate share of the taxes assessed against the homestead of the corporation, or any other entity holding title, attributable to his or her unit therein. [No] An eligible claimant shall not be entitled to [payment under this act for] a homestead property tax [reimbursement] freeze benefit on more than one homestead within the State in the same tax year.

b. When title to a homestead with respect to which a homestead property tax freeze benefit is claimed for a year is transferred to another owner during that year, the amount of the benefit shall be prorated proportionally to the number of days the eligible claimant occupied the homestead during the year.

(cf: P.L.1997, c.348, s.5)

6. Section 6 of P.L.1997, c.348 (C.54:4-8.73) is amended to read as follows:

6. Pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), the director shall promulgate such rules and regulations and prescribe such forms as the director shall deem necessary to implement [this act] P.L.1997, c.348 (C.54:4-8.67 et seq.). The director shall also promulgate rules and regulations to implement an appeals process for aggrieved persons to use if eligibility for a homestead property tax [reimbursement rebate or credit] freeze benefit is denied.

(cf: P.L.2007, c.62, s.32)

7. This act shall take effect on the first day of the tax year next following enactment, except the director may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.

STATEMENT

This bill would transform the homestead property tax reimbursement program, commonly known as the "senior freeze" program, from a reimbursement program into a credit program for most eligible homeowners. Currently, eligible seniors and disabled persons may apply for a senior freeze benefit that reimburses them, by check, for any property tax increases paid in the prior tax year over and above the amount of property taxes paid in the applicable base year. This bill would allow most of these eligible homeowners to realize these savings in the form of a credit directly applied to their property tax bills. This bill would simplify and lower the cost of administering the senior freeze program.

Eligible homeowners who reside in a unit in a cooperative, mutual housing corporation, or continuing care retirement community, and who do not pay property taxes directly to the municipality, would receive a rebate payment instead of a credit directly applied to their property tax bills.