NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.
Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.
SPONSOR: | Feldman | DATE TYPED: | 01/31/00 | HB | |||
SHORT TITLE: | Property Tax Deferral for Elderly | SB | 173 | ||||
ANALYST: | Williams |
Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
FY00 | FY01 | |||
NFI | State GO Bonding |
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates/Conflicts with/Companion to/Relates to HB 82
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
Authorizes persons seventy years or older to annually defer the date certain residential property taxes are due. The deferment would be available for the portion of property taxes due for the person's primary residence and only for tax due associated with an increase in value of the property. The person must also qualify for the maximum exemption from income tax for persons sixty-five and older or blind; the income limit ranges from $15,000 to $30,000 depending on filing status. Further, only one claimant would be permitted for each principal residence in the event that two or more individuals are eligible to claim the deferral. The taxes deferred would become due upon:
1. No longer using the home as a principal residence;
2. Sale or transfer of the home;
3. The county determines ineligibility or
4. Upon the taxpayer's death.
The deferral is capped in that if the total of deferred taxes plus total unpaid indebtedness and all other encumbrances on the home exceed 85% of the property's value for property tax purposes, then the taxpayer can no longer get the deferral. Amounts of the change in net taxable value used to calculate an amount of taxes for deferral would be developed and included in the property tax value reporting process. It is the responsibility of the claimant or his representative to notify the county of an event which would end the deferment, with potential for fine or penalty for non-compliance. Effective date would be property tax year 2002.
Significant Issues
TRD notes the bill may violate the New Mexico Constitution by postponing an obligation or liability owed to the state.
FISCAL IMPLICATIONS
TRD estimates the proposal would not have any fiscal impact on state general obligation bond funding and would have insignificant impacts on municipalities, counties, school districts and others. State debt service rates would adjust in response to a slight reduction in net taxable value; bonding capacity growth would probably be slightly deferred, but with no significant impact.
ADMINISTRATIVE IMPLICATIONS
The program could have potentially large administrative costs to establish and maintain a system to account for each claimant, changes in claimant status and balances over time as well as verification of eligibility.
AW/njw:gm