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Property Tax Deferral Program

Concerning the property tax deferral program, and, in connection therewith, making an appropriation.
2022 Regular Session
Fiscal Policy & Taxes
Local Government
State Government
Bill Summary

Currently, there is a property tax deferral program (program) for the state to make a secured loan to a qualified taxpayer to pay property taxes owed for the taxpayer's homestead. In 2021, the general assembly enacted legislation to expand the program and required the governor's office, in consultation with the state treasurer, to commission a study of the program and make recommendations for possible changes. The bill implements some of those recommendations, among other things.

The bill shifts current administrative responsibilities from county treasurers to the state treasurer. This includes requiring:

  • A taxpayer to file a claim for deferral with the state treasurer ( section 2 of the bill);
  • The state treasurer to supply the deferral forms ( section 5 );
  • The state treasurer to issue the certificate of tax deferral and record the certificate with the appropriate county clerk and recorder free of charge ( section 6 );
  • The county treasurer to refund any overpayment on an account that has been deferred to the person who paid the taxes ( section 8 );
  • A taxpayer to tender repayment of the loan to the state treasurer ( section 9 ); and
  • The state treasurer to send a deferral notice to taxpayers who have previously deferred property taxes, which notice has been updated to reflect the state treasurer's administrative role ( section 10 ). Section 11 provides that the state treasurer cannot be held personally liable for failure to provide notices relating to property in the program.

In addition, section 4 permits the state treasurer to:

  • Conduct a public education campaign about the program;
  • Contract with a third party to administer the program on behalf of the state treasurer; and
  • Promulgate rules for the administration of the program.

Section 12 creates an exception to the requirement that a loan becomes payable for a taxpayer when a property becomes uninhabitable and loses its value as a result of natural causes, which is currently defined for property taxes to mean "fire, explosion, flood, tornado, action of the elements, act of war or terror, or similar cause beyond the control of and not caused by the party holding title to the property destroyed".Section 13 permits the state treasurer to foreclose a deferred tax lien once taxes and accrued interest become delinquent, instead of requiring such foreclosure.Sections 1 and 3 make conforming amendments and sections 6 and 7 correct a defect with the initial date that interest accrues on a program loan to be consistent with another statute and current practice.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)


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Bill Text