OLR Bill Analysis
AN ACT ESTABLISHING A REVOLVING LOAN FUND TO ASSIST ELDERLY HOMEOWNERS.
This bill establishes the Elderly Homeowner Property Tax Revolving Loan Fund and allows the Office of Policy and Management (OPM) secretary to use the fund to make loans to income-eligible, elderly homeowners (age 65 or older) who failed to pay property taxes for at least two assessment years.
The bill outlines conditions governing the loans and eligibility criteria. It provides no funding source for the fund.
EFFECTIVE DATE: July 1, 2016
ELDERLY HOMEOWNER PROPERTY TAX REVOLVING LOAN FUND
The bill establishes this revolving loan fund and allows the OPM secretary to use it to provide loans at the prevailing interest rate to homeowners who:
1. are age 65 or older on the date they apply for a loan;
2. failed to pay property taxes for at least two assessment years on a property not otherwise encumbered;
3. have lived in the municipality where the property is located for at least 10 years before applying; and
4. in the tax year immediately preceding the application date, have qualifying income not exceeding the income limit for the existing circuit breaker program, which is currently $35,200 for an unmarried person and $42,900 for a married couple (see BACKGROUND).
In addition, the bill allows the OPM secretary to set asset limits as a condition of eligibility.
The principal loan amount must not exceed the amount of taxes levied against the property.
If the state provides a loan, the OPM secretary must establish a lien on the property subject to taxes in the amount of the loan, plus interest at the prevailing interest rate, as he determines. The lien has priority over all other liens on the property, except a municipal property tax lien.
Under the bill, investment earnings credited to the fund become part of the fund's assets. Any fiscal year-end fund balance must be carried over to the next fiscal year. Principal or interest payments on loans under the bill must be remitted to the state treasurer for deposit in the fund. The fund must be used to (1) make loans as specified above and (2) pay reasonable and necessary expenses incurred in administering the loan program.
Eligibility for Other Tax Relief Programs
The bill specifies that homeowners who receive loans from the fund remain eligible for other municipal property tax relief available to elderly homeowners under the local option tax relief, circuit breaker, and tax freeze programs.
Circuit Breaker Program
This program entitles seniors and homeowners who are totally disabled to a property tax credit of up to $1,000 for single persons and $1,250 for married couples. An applicant must (1) be age 65 or older, have a spouse who is age 65 or older, be at least age 50 and a surviving spouse of someone who upon death was eligible for the program, or be totally and permanently disabled; (2) occupy the property as his or her home; and (3) have income under a certain threshold. The income limit is adjusted annually (CGS § 12-170aa).