AN ACT CONCERNING A CIRCUIT BREAKER FOR THE PROPERTY TAX.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-124a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008, and applicable to assessment years commencing on or after October 1, 2008):

(a) [Any municipality may, upon approval by its legislative body or in any town in which the legislative body is a town meeting, by the board of selectmen,] Each municipality shall abate the property taxes due for any tax year with respect to any residential dwelling occupied by the owner or owners and for whom such dwelling is the primary place of residence, to the extent that such property taxes exceed [eight] six per cent or more of the total income from any source, adjusted for self-employed persons to reflect the allowance for expenses in determining adjusted gross income for federal income tax purposes, of such owner or owners and any other person for whom such dwelling is the primary place of residence, for the calendar year immediately preceding the beginning of the tax year for which such taxes are due. Application for such abatement shall be made not later than thirty days preceding the tax due date for such tax year, provided if the amount of such taxes has not been determined on such date, within ten days following determination of the amount of such taxes.

(b) [Whenever any municipality has approved abatement of taxes as provided in subsection (a) of this section, the] The owner or owners shall deliver to the tax collector in such municipality, not later than ten days following the tax due date for such taxes abated, an agreement, on a form executed and acknowledged in the form and manner required for the transfer of an interest in real property, to reimburse such municipality in the amount of the taxes abated. [, with interest at six per cent per annum or such rate as approved by the legislative body.] Such agreement shall contain a legal description of the real property with respect to which such abatement is approved and shall be recorded in the land records of such municipality. Such agreement shall constitute a lien on such real property which shall remain valid until paid. Such lien shall be due and payable in full upon the sale or transfer of such real property or upon the death of the owner, or if owned by more than one person at the time such lien is created, upon the death of the last of such owners surviving. Such lien shall be released by the tax collector in such municipality when the taxes secured thereby have been paid. No lien recorded under the provisions of this subsection shall take precedence over any mortgage recorded in the land records prior to such certificate of lien.

(c) On or before June thirtieth annually, the Secretary of the Office of Policy and Management shall determine the amount due, as payment for residential property tax relief, to each town in the state wherein there is a differential between the property tax liability and the income-adjusted property tax liability, as required pursuant to section 12-62a.

Sec. 2. (Effective from passage) The sum of ____ dollars is appropriated to the Office of Policy and Management, from the General Fund, for the fiscal year ending June 30, 2008, for residential property tax relief provided pursuant to section 12-124a of the general statutes, as amended by this act.

Statement of Purpose:

To provide residential property tax relief by limiting property tax liability to not more than six per cent of a resident's income.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]