You asked for information about proposed HB 6271, An Act Concerning Liens Filed Under the Provisions of the Optional Municipal Property Tax Relief Program for Seniors.

SUMMARY

The proposed bill (i. e. , not yet fully drafted) would amend a law that allows towns to provide a property tax break to people over age 65 and disabled people by reducing the amount of a potential property lien required under certain circumstances. Current law requires a town to put a lien on the property of a person receiving the tax break when his or her tax relief equals 75% or more of the tax owed, with the lien amount equaling the entire amount of tax relief. The bill instead would require the lien amount to equal only the portion of the benefit over 75%, thus reducing the lien.

By law, towns may provide optional property tax relief to seniors over 65 and disabled people (CGS § 12-129n). The law allows towns that provide this optional property tax relief to impose a lien in the amount of the relief granted. But it requires towns to impose a lien when the benefits from this and two other senior tax relief programs for which an individual may be eligible reach a certain level. Specifically, the law requires a town to put a lien on the property if the total amount of tax relief from this and the other two programs is more than 75% of the tax owed. Under current law, the lien equals the total amount of tax relief granted under all three programs. The bill instead proposes to change the lien amount to the amount of the tax relief granted from the combined programs above 75%. Under both current law and the bill, such a lien has priority in settlement of the person's estate.

BACKGROUND

The other two programs counted toward the 75% threshold under the optional property tax above are the “circuit breaker” and the Property Tax Freeze programs.

The circuit breaker program (known formally as the Elderly and Totally Disabled Tax Relief Program) entitles elderly and disabled people to a property tax reduction or a rent rebate, depending on whether they are homeowners or renters. An applicant must (1) be 65 years of age or older, have a spouse who is 65 or older, or be at least 50 and a surviving spouse of someone who at the time of death was eligible for the program; (2) occupy the property as his or her home; and (3) have lived in Connecticut at least one year before applying. For applications filed in 2006, yearly income in 2005 could not exceed $ 33,900 for married couples and $ 27,700 for singles. The income limits are adjusted annually for inflation (CGS §§ 12-170aa-cc).

The Freeze Tax Relief Program was established in 1967. Elderly (65 years old and older) and disabled people who applied and qualified for tax relief had their property tax frozen at that year's level, with certain adjustments, if they owned and resided in their home. No new applicants have been allowed since May 15, 1980. Anyone who was in the program before then may stay in the program as long as they continue to meet all the law's conditions and requirements. The surviving spouse of a beneficiary is entitled to the benefit if she is 50 or older, lived with the beneficiary at the time of his death, and meets the income limits (CGS § 12-129b).

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