Establishing a surviving spouse property tax deferral program for certain persons who have attained the age of sixty-five, applying income limitations, providing a penalty, making appropriations, and including applicability provisions

An initial claim for a deferral must be filed with the department of revenue between January and February immediately following the close of the assessment year for which property taxes due and payable will be calculated. The department of revenue may investigate the facts or require confirmation in regard to an application. The approved deferral is valid for future years unless suspended or terminated as provided in the bill. The department then records or files a notice of qualification for deferral in the office of the county recorder for the county where the qualifying property is located, and that notice must state that it serves as a notice of lien and that it includes deferrals under the program for future years. A claimant participating in the program may temporarily suspend the deferral if the claimant’s household income exceeds $60,000 for one or more years. The department is required to determine each qualifying claimant’s annual maximum property tax amount following approval of the claimant’s initial application. The annual maximum property tax amount equals percent of the claimant’s total household income for the year preceding either the initial application or the resumption following a temporary suspension, but not to exceed the amount of property taxes due and payable on the homestead for the year prior to the initial application. When the amount of property tax due and payable in an applicable fiscal year has been determined, the department of revenue is required to calculate each claimant’s deferred property tax amount. The deferred property tax amount is equal to the difference between the total amount of property taxes due and payable on the homestead and the annual maximum property tax amount, subject to the claimant’s total maximum allowable deferral. The total maximum allowable deferral for all participating years is an amount equal to percent of the homestead’s actual value, less the balance of any mortgage loans and other amounts secured by liens against the property at the time of application, including any unpaid and delinquent special assessments and interest and any delinquent property taxes, penalties, and interest. Upon approval of a claimant’s initial application, the department of revenue pays to the treasurer of the county where the property is located the amount of any delinquent property taxes, penalties, interest, and delinquent special assessments and interest on the property. The department of revenue also pays annually the deferred amount of property tax to each county treasurer on or before August 31. The county treasurer shall distribute the funds received to the appropriate taxing entities as if they had been collected as a part of the property tax. An amount sufficient to pay the total amount of property taxes deferred, plus any amounts of delinquent property taxes, penalties, interest, and delinquent special assessments and interest paid for initial applications, is annually appropriated from the general fund of the state to the department of revenue. Payment by the state to the county treasurer of property taxes, penalties, interest, or special assessments and interest deferred under the bill is deemed a loan from the state to the claimant. The department must compute the interest at the rate provided in the bill, and maintain records of the total deferred amount and interest for each participant in the program. The lien created for the deferral of property taxes continues to secure payment by the claimant, or by the claimant’s successors or assigns, of the amount deferred, including interest, with respect to all years for which amounts are deferred. The deferral of property taxes granted under the bill terminates when one of the following occurs: (1) the homestead is sold or transferred, or no longer qualifies as a homestead; (2) the death of the claimant; (3) the claimant is no longer unmarried; or (4) the claimant notifies the department in writing that the homeowner desires to discontinue the deferral. Upon the termination of the deferral, the amount of deferred taxes, penalties, interest, and special assessments and interest, plus any unpaid recording or filing fees, becomes due and payable to the department of revenue within one year of termination of the deferral. On receipt of payment, the department shall within days notify the county recorder in which the parcel is located and a notice of termination of deferral, and a notice shall be prepared and recorded or filed with the county recorder. Upon recording or filing of the notice of termination of deferral, the notice of qualification for deferral and the lien created by it are discharged. Upon receipt by the department of collected funds in the amount of the deferral, the state’s loan to the program participant is deemed paid in full. A person who makes a false affidavit for the purpose of obtaining a deferral or who knowingly receives the deferral without being legally entitled to it is guilty of a fraudulent practice. The bill also establishes requirements for administering the program, including requirements for notices, appeals, and rulemaking of the department. The bill applies retroactively to January 1, 2022, for assessment years beginning on or after that date and to the filing of claims for deferral on or after January 1, 2023.