HP0851, LD 1207, item 1, An Act To Expand the Property Tax Exemption for Veterans Who Are 100% Disabled

An Act To Expand the Property Tax Exemption for Veterans Who Are 100% Disabled

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 36 MRSA §653, sub-§1, ¶C, as amended by PL 2007, c. 240, Pt. PPPP, §1, is further amended to read:

C. The estates up to the just value of $6,000, having a taxable situs in the place of residence, of veterans who served in the Armed Forces of the United States:

(1) During any federally recognized war period, including the Korean Campaign, the Vietnam War, the Persian Gulf War and the periods from August 24, 1982 to July 31, 1984 and December 20, 1989 to January 31, 1990, or who were awarded the Armed Forces Expeditionary Medal, when they have reached the age of 62 years or when they are receiving any form of pension or compensation from the United States Government for total disability, service-connected or nonservice-connected, as a veteran. A veteran of the Vietnam War must have served on active duty for a period of more than 180 days, any part of which occurred after February 27, 1961 and before May 8, 1975 unless the veteran died in service or was discharged for a service-connected disability after that date. "Persian Gulf War" means service on active duty on or after August 2, 1990 and before or on the date that the United States Government recognizes as the end of that war period ; or .

(2) Who are disabled by injury or disease incurred or aggravated during active military service in the line of duty and are receiving any form of pension or compensation from the United States Government for total, service-connected disability.

The exemptions provided in this paragraph apply to the property of that veteran, including property held in joint tenancy with that veteran's spouse or held in a revocable living trust for the benefit of that veteran.

Sec. 2. 36 MRSA §653, sub-§2, as enacted by PL 2007, c. 418, §1, is amended to read:

2. Cooperative housing corporations. A cooperative housing corporation is entitled to an exemption under this section to be applied against the valuation of property of the corporation that is occupied by qualifying shareholders. An application for exemption must include a list of all qualifying shareholders and any information required by the municipality to verify eligibility of qualifying shareholders and the applicable exemption amount. The application must be updated annually to reflect changes in eligibility. The exemption is equal to the total amount calculated under subsection 1 or 3 as if the qualifying shareholders were owners of the property. A cooperative housing corporation that receives an exemption pursuant to this section shall apportion the property tax reduction resulting from the exemption among the qualifying shareholders according to the proportion of the total exemption that each qualifying shareholder would be entitled to if the qualifying shareholder were the owner of the property. Any supplemental assessment resulting from disqualification for exemption must be applied in the same manner against the qualifying shareholders for whom the disqualification applies. For the purposes of this subsection, the following terms have the following meanings.

A. "Cooperative housing corporation" means an entity organized for the purpose of owning residential real estate in which residents own shares that entitle them to inhabit a designated space within a residential dwelling.

B. "Qualifying shareholder" means a person who is a shareholder in a cooperative housing corporation who would qualify for an exemption under subsection 1 or 3 if the person were the owner of the property.

Sec. 3. 36 MRSA §653, sub-§3 is enacted to read:

3. Estates of veterans who are totally disabled. The estate of a veteran who is disabled by injury or disease incurred or aggravated during active military service in the line of duty and is receiving any form of pension or compensation from the United States Government for total, service-connected disability is exempt from taxation. The following provisions apply regarding the exemption provided in this subsection.

A. As used in this subsection, “veteran” means a person who was in active service in the Armed Forces of the United States and who, if discharged, retired or separated from the Armed Forces, was discharged, retired or separated under other than dishonorable conditions.

B. The exemption provided by this subsection is in lieu of any exemption under subsection 1 to which a veteran may be eligible and applies to the property of that veteran, including property held in a revocable living trust for the benefit of that veteran.

C. An exemption may not be granted to a person under this subsection unless the person is a resident of this State.

D. A person who desires to secure exemption under this subsection shall make written application and file written proof of entitlement on or before the first day of April in the year in which the exemption is first requested with the assessor of the place in which the person resides. The assessor shall thereafter grant the exemption to the person who is so qualified and remains a resident of that place or until the assessor is notified of the reason or desire for discontinuance.

E. A municipality granting an exemption under this subsection is entitled to reimbursement from the State of 90% of that portion of the property tax revenue lost as a result of the exemptions that exceeds 3% of the total municipal property tax levy, upon submission of proof in a form satisfactory to the State Tax Assessor. An exemption granted under this subsection that is reimbursable pursuant to section 661 is not eligible for reimbursement under this paragraph.

F. Property conveyed to a person for the purpose of obtaining an exemption from taxation under this subsection is not exempt, except property conveyed between spouses. A person who obtains an exemption by means of fraudulent conveyance is subject to a fine of not less than $100 and not more than 2 times the amount of the taxes evaded by the fraudulent conveyance, whichever amount is greater.

Sec. 4. Application. This Act applies to property tax years beginning on or after April 1, 2014.

Sec. 5. Effective date. This Act takes effect April 1, 2014.

SUMMARY

Current law provides a tax exemption of up to $6,000 of the value of property held by a veteran who is receiving any form of pension or compensation from the United States Government for total, service-connected disability. This bill provides a complete exemption from property taxes for the estate of a veteran who is receiving any form of pension or compensation from the United States Government for total, service-connected disability. The same provisions that apply to the current property tax exemptions for veterans apply to the exemption established in this bill, including requiring the veteran to be a resident of this State, allowing the exemption for property held in a revocable living trust or that is cooperative housing and requiring the State to reimburse a municipality for 90% of the portion of the lost property tax revenue that exceeds 3% of the total municipal property tax levy.

HP0851 LD 1207	Session - 126th Maine Legislature		LR 1829 Item 1
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