You asked for a summary of sSB 531, AAC Options to Abate Property Taxes, favorably reported by the Planning and Development Committee.

This bill repeals the law that allows municipalities to adopt a residential property tax relief program, funded by a surcharge on nonresidential properties. To date, only Hartford has adopted this program.

By law, the legislative body of any municipality can abate that part of a homeowner's property taxes that exceeds 8% of his total income. The owners must agree that the abatement will be repaid to the municipality when the property is sold or when the last surviving owner dies. The bill gives municipalities that have a surcharge funded tax relief program on January 1, 2006 an additional tax abatement option. Under the new option, the municipality can abate that part of the taxes on a one, two, or three unit residential building that exceeds 4% of the owners' total income. The building must be occupied by one or more of the owners, and the building must be their primary residence. They must apply for the abatement at least 45 days before the tax due date, or ten days after the amount of the taxes due on the property, whichever is later. Under the bill, the municipality does not have to apply the recapture/lien provisions under the new abatement if its legislative body votes to repeal its surcharge funded tax relief program. (The bill does not specifically extend these provisions to the new abatement. Moreover, it is unclear why a municipality's legislative body would repeal its program, since the bill repeals its statutory authorization. )

A municipality that adopts the new abatement program must require each applicant to sign a form, under penalty of false statement, attesting to the income of the owners and their families. It must reject any applications for seven years after an applicant files a false statement and the amount of the abatement is considered a delinquency. The municipality may also adopt an ordinance establishing auditing and review procedures for the new abatement program.

Effective Date: October 1, 2006 and applicable to assessment years starting on or after this date.

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