A887

ASSEMBLY, No. 887

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman GARRETT and Assemblywoman CRECCO

An Act concerning the gross income tax and property taxes paid on homesteads, amending N.J.S.54A:1-2 and P.L.1981, c.239, supplementing chapter 4 of Title 54A of the New Jersey Statutes and repealing sections 1 through 10 of P.L.1990, c.61 (C.54:4-8.57 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. N.J.S.54A:1-2 is amended to read as follows:

54A:1-2. As used in this act, unless the context clearly indicates otherwise, the following words and phrases shall have the following meaning:

a. "Director" means the Director of the Division of Taxation in the Department of the Treasury.

b. "Fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person.

c. "Excludable income" shall be limited to those payments set forth in chapter 6 hereunder.

d. "Gross income" shall include that set forth in chapter 5 hereunder.

e. "Dependent" means a spouse or child or any individual related to the taxpayer and who is a dependent pursuant to the provisions of the Internal Revenue Code during a taxable year.

f. "Disabled" means total and permanent inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment, including blindness. For purposes of this subsection, "blindness" means central visual acuity of 20/200 or less in the better eye with the use of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees shall be considered as having a central visual acuity of 20/200 or less.

g. "Medical expenses" means nonreimbursed payments for physicians, dental and other medical fees, hospital care, nursing care, medicines and drugs, prosthetic devices, X-rays and other diagnostic services conducted by or directed by a physician or dentist. In addition, medical expenses may also include amounts paid for transportation primarily for and essential to medical care and insurance (including amounts paid as premiums under part B of Title XVIII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care.

h. Partnership and partner. The term "partnership" includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this act, a trust or estate or a corporation; and the term "partner" includes a member in such a syndicate, group, pool, joint venture, or organization.

i. Blank.

j. Blank.

k. "Taxable year" means the calendar or fiscal accounting period for which a tax is payable under this act.

l. "Taxpayer" means any individual, estate or trust required to report or to pay taxes, interest and penalties under this act, or whose income in whole or in part is subject to the tax imposed by this act.

m. "Resident taxpayer" means an individual:

(1) Who is domiciled in this State, unless he maintains no permanent place of abode in this State, maintains a permanent place of abode elsewhere, and spends in the aggregate no more than 30 days of the taxable year in this State; or

(2) Who is not domiciled in this State but maintains a permanent place of abode in this State and spends in the aggregate more than 183 days of the taxable year in this State, unless such individual is in the Armed Forces of the United States.

n. "Nonresident taxpayer" means a taxpayer who is not a resident.

o. Resident estate or trust. A resident estate or trust means:

(1) The estate of a decedent who at his death was domiciled in this State,

(2) A trust, or a portion of a trust, consisting of property transferred by will of a decedent who at his death was domiciled in this State, or

(3) A trust, or portion of a trust, consisting of the property of:

(a) A person domiciled in this State at the time such property was transferred to the trust, if such trust or portion of a trust was then irrevocable, or if it was then revocable and has not subsequently become irrevocable; or

(b) A person domiciled in this State at the time such trust, or portion of a trust, became irrevocable, if it was revocable when such property was transferred to the trust but has subsequently become irrevocable.

For the purposes of the foregoing, a trust or portion of a trust is revocable if it is subject to a power, exercisable immediately or at any future time, to revest title in the person whose property constitutes such trust or portion of a trust, and a trust or portion of a trust becomes irrevocable when the possibility that such power may be exercised has been terminated.

p. Nonresident estate or trust. A nonresident estate or trust means an estate or trust which is not a resident.

q. Unless the context in which it occurs requires otherwise, the term "act" or "this act" shall mean the New Jersey Gross Income Tax Act, Title 54A of the New Jersey Statutes.

r. "Condominium" means the form of real property ownership provided for under the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.).

s. "Continuing care retirement community" means a residential facility primarily for retired persons where lodging and nursing, medical or other health related services at the same or another location are provided as continuing care to an individual pursuant to an agreement effective for the life of the individual or for a period greater than one year, including mutually terminable contracts, and in consideration of the payment of an entrance fee with or without other periodic charges.

t. "Cooperative" means a housing corporation or association which entitles the holder of a share or membership interest thereof to possess and occupy for dwelling purposes a house, apartment, manufactured or mobile home or other unit of housing owned or leased by the corporation or association, or to lease or purchase a unit of housing constructed or to be constructed by the corporation or association.

u. "Dwelling house" means any residential property assessed as real property which consists of not more than four units, of which not more than one may be used for commercial purposes, but shall not include a unit in a condominium, cooperative, horizontal property regime or mutual housing corporation.

v. "Homestead" means:

(1) (a) a dwelling house and the land on which that dwelling house is located which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;

(b) a dwelling house situated on land owned by a person other than the claimant which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;

(c) a condominium unit or a unit in a horizontal property regime which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;

(d) for purposes of this definition as provided in this subsection, in addition to the generally accepted meaning of owned or ownership, a homestead shall be deemed to be owned by a person if that person is a tenant for life or a tenant under a lease for 99 years or more and is entitled to and actually takes possession of the homestead under an executory contract for the sale thereof or under an agreement with a lending institution which holds title as security for a loan, or is a resident of a continuing care retirement community pursuant to a contract for continuing care for the life of that person which requires the resident to bear, separately from any other charges, the proportionate share of property taxes attributable to the unit that the resident occupies;

(2) a unit in a cooperative or mutual housing corporation which constitutes the place of domicile of a residential shareholder or lessee therein, or of a lessee, or shareholder who is not a residential shareholder therein, and which is used by the claimant as the claimant's principal residence; and

(3) a unit of residential rental property which unit constitutes the place of the claimant's domicile and is used by the claimant as the claimant's principal residence.

w. "Horizontal property regime" means the form of real property ownership provided for under the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.).

x. "Reportable gross income" means all New Jersey gross income required to be reported pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., other than income excludable from the gross income tax return, but before reduction thereof by any applicable exemptions, deductions and credits, received during the taxable year by the owner or residential shareholder in, or lessee of, a homestead.

y. "Mutual housing corporation" means a corporation not-for-profit, incorporated under the laws of this State on a mutual or cooperative basis within the scope of section 607 of the Lanham Act (National Defense Housing), Pub.L.849, 76th Congress (42 U.S.C. §1521 et seq.), as amended, which acquired a National Defense Housing Project pursuant to that act.

z. "Principal residence" means a homestead actually and continually occupied by a claimant as the claimant's permanent residence, as distinguished from a vacation home, property owned and rented or offered for rent by the claimant, and other secondary real property holdings.

aa. "Rent constituting property taxes" means 18% of the rent paid by the claimant during the tax year on a unit of residential rental property which constitutes the claimant's homestead.

bb. "Residential rental property" means:

(1) any building or structure or complex of buildings or structures in which dwelling units are rented or leased or offered for rental or lease for residential purposes;

(2) a rooming house, hotel or motel, if the rooms constituting the homestead are equipped with kitchen and bathroom facilities; and

(3) any building or structure or complex of buildings or structures constructed under the following sections of the National Housing Act (Pub.L.73-479) as amended and supplemented: section 202, Housing Act of 1959 (Pub.L.86-372) and as subsequently amended, section 231, Housing Act of 1959.

cc. "Residential shareholder in a cooperative or mutual housing corporation" means a tenant or holder of a membership interest in that cooperative or corporation, whose residential unit therein constitutes the tenant or holder's domicile and principal residence, and who may deduct real property taxes for purposes of federal income tax pursuant to section 216 of the federal Internal Revenue Code of 1986, 26 U.S.C. §216.

(cf: N.J.S.54A:1-2)

2. (New section) Sections 2 through 10 of this act shall be known as and may be cited as the "Homestead Property Tax Credit Act."

3. (New section) a. Except for a resident taxpayer who is allowed a credit pursuant to subsection b. of this section which exceeds the minimum credit provided for in this subsection, or who is allowed a credit pursuant to section 4 or 5 of this act, a resident taxpayer shall be allowed:

(1) a minimum credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., of $150 for property taxes paid on one homestead during the taxable year if the claimant's reportable gross income does not exceed $70,000 for that year; or

(2) a minimum credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., of $100 for property taxes paid on one homestead during the taxable year if the claimant's reportable gross income exceeds $70,000 but does not exceed $100,000 for that year.

If a claimant who is eligible for the minimum credit pursuant to this subsection paid property taxes on homesteads maintained as such in this State for less than the full taxable year, the minimum credit shall be prorated in the proportion which the number of days that the homesteads were maintained during the taxable year bears to 365 days. A claim for the minimum credit pursuant to this subsection shall be subject to any further proportionate reduction as may be required pursuant to subsections d. and e. of this section. A minimum credit subject to any proportionate reduction shall be rounded to the nearest whole dollar. A claim for a minimum credit based upon a homestead maintained by both spouses shall be determined based upon the combined reportable gross income of both spouses regardless of whether the claimants filed a joint New Jersey gross income tax return or separate New Jersey gross income tax returns for the taxable year.

b. Except for a resident of this State who is allowed a credit pursuant to subsection a. of this section, or who is allowed a credit pursuant to section 4 or 5 of this act, a resident taxpayer shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for the taxable year equal to the amount by which property taxes paid by the claimant in that taxable year on the claimant's homestead exceed 5% of the claimant's reportable gross income, up to a maximum credit of $500 (rounded to the nearest whole dollar), provided that:

(1) in the case of a married couple filing a joint New Jersey gross income tax return or an individual filing a return who determines gross income tax pursuant to subsection a. of N.J.S.54A:2-1, reportable gross income does not exceed $70,000 for that year;

(2) in the case of an unmarried individual who determines gross income tax pursuant to subsection b. of N.J.S.54A:2-1, reportable gross income does not exceed $35,000 for that year;

(3) in the case of a married individual filing a separate New Jersey gross income tax return, if the spouse of the claimant maintains the same homestead as the claimant and also files a separate gross income tax return in this State, the combined reportable gross income of both spouses does not exceed $70,000, but in no event shall the credit claimed under this subsection exceed one-half of the amount of the credit allowable had the spouses filed a joint return and credit application; and

(4) in the case of a married individual filing a separate gross income tax return and maintaining a homestead apart from that individual's spouse, reportable gross income does not exceed $35,000.

c. A credit shall be allowed pursuant to subsection b. of this section in relation to the amount of the property taxes actually paid by or allocable to a resident property taxpayer who is a claimant on more than one homestead, but the aggregate amount of the property taxes claimed shall not exceed the total of the proportionate amounts of property taxes assessed and levied against or allocable to each homestead for the portion of the taxable year the claimant occupied it as the claimant's principal residence.

d. If title to a homestead is held by more than one individual as joint tenants or tenants in common, each individual shall be allowed a credit pursuant to this section only in relation to the individual's proportionate share of the property taxes assessed and levied against the homestead. The individual's proportionate share of the property taxes on that homestead shall be equal to the share of that individual's interest in the title. Title may be presumed to be held in equal shares among all co-owners, but if the conveyance under which the title is held provides for unequal interests therein, a claimant's share of the property taxes paid on that homestead shall be in proportion to the claimant's interest in the title.

e. If the homestead of a claimant is a residential property consisting of more than one unit, that claimant shall be allowed a credit pursuant to this section only in relation to the proportionate share of the property taxes assessed and levied against the residential unit occupied by that claimant, as determined by the local tax assessor.

f. Nothing in this section shall preclude a co-owner, other than a husband or wife claiming a credit for the same homestead, from claiming a minimum credit pursuant to subsection a. of this section if another co-owner claims a credit pursuant to subsection b. of this section, provided however, that each such claim shall be separately subject to the provisions of subsections d. and e. of this section.

4. (New section) a. Except for a resident taxpayer who is allowed a credit pursuant to subsection b. of this section which exceeds the minimum credit provided for in this subsection, or who is allowed a credit pursuant to section 3 or 5 of this act, a resident taxpayer whose homestead is a unit of residential rental property shall be allowed:

(1) a minimum credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., of $65 for property taxes paid through rent on the homestead during the taxable year if the claimant's reportable gross income does not exceed $70,000 for that year; or

(2) a minimum credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., of $35 for property taxes paid through rent on the homestead during the taxable year if the claimant's reportable gross income exceeds $70,000 but does not exceed $100,000 for that year.

If a claimant who is eligible for the minimum credit pursuant to this subsection paid rent for less than the full taxable year on one or more homesteads in this State maintained as such for less than the full taxable year, the minimum credit shall be proratedin the proportion which the number of days that the homestead was maintained during the tax year bears to 365 days. A claim for a minimum credit pursuant to this subsection shall be subject to such further proportionate reduction as may be required pursuant to subsections c. and d. of this section. A minimum credit subject to any proportionate reduction shall be rounded to the nearest whole dollar. A claim for a minimum credit based upon a homestead maintained by both spouses shall be determined based upon the combined reportable gross income of both spouses regardless of whether the claimants filed a joint New Jersey gross income taxable return or separate New Jersey gross income tax returns for the taxable year.

b. Except for a resident taxpayer who is allowed a credit pursuant to subsection a. of this section, or who is allowed a credit pursuant to section 3 or 5 of this act, a resident taxpayer whose homestead is a unit of residential rental property shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for the taxable year equal to the amount by which the claimant's rent constituting property taxes in that taxable year exceeds 5% of the claimant's reportable gross income, up to a maximum credit of $500 (rounded to the nearest whole dollar), provided that:

(2) in the case of an unmarried individual who determines gross income tax pursuant to subsection b. of N.J.S.54A:2-1, reportable gross income does not exceed $35,000 for that year;

(4) in the case of a married individual filing a separate gross income tax return and maintaining a homestead apart from that individual's spouse, reportable gross income does not exceed $35,000.

c. If more than one resident, other than a husband and wife, qualify for a credit by reason of their having occupied the same unit of residential rental property as their homestead, it shall be presumed that each claimant shall be allowed a credit pursuant to either subsection a. or subsection b. of this section only in relation to the individual's proportionate share of the total rent constituting property taxes paid by that claimant which credit shall be in proportion to the percentage that the total rent paid by that claimant bears to the total rent paid by all tenants of the same unit. For the purposes of a credit claimed by an individual subject to this subsection, the names and social security numbers of each co-tenant shall be reported by the claimant and the total rent paid shall be presumed to be paid in equal parts among all co-tenants.

d. If a claimant for a credit either pursuant to subsection a. or subsection b. of this section has no other homestead in this State other than a unit of residential rental property, and that claimant was not a resident of this State for the full taxable year, but paid rent for the full taxable year for one or more units of residential rental property in this State, the claimant's total credit otherwise calculated pursuant to subsection a. or subsection b. of this section shall be prorated in the proportion which the number of days the claimant occupied residential rental property in this State as a homestead during the taxable year bears to 365 days.

e. Nothing in this section shall preclude a co-tenant, other than a husband or wife claiming a credit on the same homestead, from claiming a minimum credit pursuant to subsection a. of this section if another co-tenant claims a credit pursuant to subsection b. of this section, provided however, that each such claim shall be separately subject to the provisions of subsections c. and d. of this section.

5. (New section) a. Except for a resident taxpayer who is allowed a credit pursuant to subsection b. of this section which exceeds the minimum credit provided for in this subsection, or who is allowed a credit pursuant to section 3 or 4 of this act, a resident taxpayer for the full taxable year for which a credit is claimed, who has paid property taxes on a homestead other than a unit of residential rental property for a part of the taxable year and has paid property taxes through rent on a unit of residential rental property for the remainder of that year, shall be allowed a minimum credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for that taxable year equal to:

(1) the sum of that portion of $150 which the number of days that the claimant's homestead was other than a unit of residential rental property bears to 365 days and that portion of $65 which the number of days that the claimant's homestead was a unit of residential rental property bears to 365 days, if the claimant's reportable gross income does not exceed $70,000 for that year; or

(2) the sum of that portion of $100 which the number of days that the claimant's homestead was other than a unit of residential rental property bears to 365 days and that portion of $35 which the number of days that the claimant's homestead was a unit of residential rental property bears to 365 days, if the claimant's reportable gross income exceeds $70,000 but does not exceed $100,000 for that year.

A claim for a minimum credit pursuant to this subsection shall first be subject to such further proportionate reductions to the respective portions of the sums determined pursuant to paragraph (1) or (2) hereinabove as may be required pursuant to subsections d. and e. of section 3 and subsections c. and d. of section 4 of this act. A minimum credit determined pursuant to this subsection shall be rounded to the nearest whole dollar. A claim for a minimum credit based upon a homestead maintained by both spouses shall be determined based upon the combined reportable gross income of both spouses regardless of whether the claimants filed a joint New Jersey gross income tax return or separate New Jersey gross income tax returns for the taxable year.

b. Except for a resident taxpayer who is allowed a credit pursuant to subsection a. of this section, or who is allowed a credit pursuant to section 3 or 4 of this act, a resident taxpayer for the full tax year for which a credit is claimed, whose homestead has been other than a unit of residential rental property for a part of the taxable year and has been a unit of residential rental property for the remainder of that year, shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for that taxable year equal to the amount by which the sum of the actual property taxes paid by the claimant and the rent constituting property taxes paid by the claimant in that taxable year exceeds 5% of the claimant's reportable gross income, up to a maximum credit of $500 (rounded to the nearest whole dollar), provided that:

(2) in the case of an unmarried individual who determines gross income tax pursuant to subsection b. of N.J.S.54A:2-1, reportable gross income does not exceed $35,000 for that year;

(4) in the case of a married individual filing a separate gross income tax return and maintaining a homestead apart from that individual's spouse, reportable gross income does not exceed $35,000.

6. (New section) a. No credit shall be allowed pursuant to this act except upon annual written application therefor, in a manner and on a form prescribed by the director. The director may require a claimant to attach to the credit application a copy of the appropriate property tax bill or proof of rent paid for the taxable year. The director may require such other verification of eligibility for a credit as the director may deem necessary. The application form shall be submitted (1) as part of the claimant's gross income tax return filed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or , (2) on any other form and at any time as the director shall prescribe if (a) the claimant is not required to file a gross income tax return or (b) the claimant has filed an application for extension of time to file the claimant's gross income tax return. The director shall, for good cause shown, extend the time of any applicant to file a claim for a credit for a reasonable period, and in such case, the application shall be processed and crediting or payment made in accordance with the procedures established in the case of applications timely filed. The director may require sworn applications. In the event that the director waives the requirement of sworn applications, all declarations by claimants shall be considered as if made under oath and claimants, as to false declarations, shall be subject to the penalties as provided by law for perjury.

b. The director may inspect the records in the office of the tax collector of a municipality with respect to claims for credits.

c. If a credit application contains a claim for a credit that is incorrectly determined by the claimant or is based upon incorrect or insufficient information from which the director is to approve the claim, the director may determine the eligibility of the claimant for a credit and the correct amount of a credit to be paid to that claimant from such other information as may be available to the director. In addition, the director may adjust the amount of any credit to which a claimant may be entitled by any part of the amount of any previous credit erroneously claimed by and paid to that claimant.

d. In the case of a claimant whose homestead is a unit in a cooperative, mutual housing corporation or continuing care retirement community, the application shall include the name and address of the location of the property and the amount of real property taxes attributed to the cooperative, mutual housing residential unit or continuing care retirement community residential unit, as shall be indicated in an official notice which shall be furnished by the cooperative, mutual housing corporation or continuing care retirement community for the same year.

e. A credit shall be allowed pursuant to this act for a claimant whose ownership of an interest in a homestead is satisfied by the holding of the beneficial interest if legal title thereto or share therein is held by another for the benefit of the claimant.

7. (New section) The tax collector of each municipality shall, on or before March 1 of each year, furnish the director with a list of property taxpayers in the district delinquent for taxes due and payable during the year immediately preceding and the amounts of such delinquencies. The collector shall report on such list the name, lot and block number on the property tax duplicate as may be applicable, and the address of each owner to whom a delinquency is attributable together with the amount of such delinquency so identified. No credit under this act shall be allowed a property owner listed as delinquent pursuant to this section, provided however that for the purposes of this act, property which is on appeal and for which the statutory percentage of the tax as provided in R.S.54:3-27 has been paid shall not be regarded as delinquent.

8. (New section) The payment of any excess property tax credit authorized under this act shall not be subject to garnishment, attachment, execution or other legal process, except as provided in section 1 of P.L.1981, c.239 (C.54A:9-8.1), or except for an income withholding order issued pursuant to P.L.1981, c.417 (C.2A:17-56.7 et seq.), nor shall the payment thereof be anticipated.

9. (New section) a. Any citizen and resident of this State who has paid property taxes on a homestead or whose homestead is a residential rental property but who is not required to file a return under the "New Jersey Gross Income Tax Act," N.J.S.54:1-1 et seq., shall be entitled to apply for a refundable homestead property tax credit pursuant to section 3, 4, or 5 as may be applicable.

b. The credit allowed pursuant to this section shall be applied as a payment of tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the amount of any such credit not applied as a payment of tax otherwise due shall be considered as overpayment of tax subject to refund, further credit or setoff pursuant to N.J.S.54A:9-7 and N.J.S.54A:9-8 and P.L.1981, c.239 (C.54A:9-8.1 et seq.).

10. (New section) If a credit allowed pursuant to section 3, 4 or 5 of this act reduces tax liability to below zero, then the amount by which the credit reduces the tax liability below zero shall be considered an overpayment of tax and shall be refunded. Such refund shall be paid in the same manner as other refunds under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

11. Section 1 of P.L.1981, c.239 (C.54A:9-8.1) is amended to read as follows:

1. Whenever any taxpayer or homeowner shall be entitled to any refund of taxes pursuant to the "New Jersey Gross Income Tax" (N.J.S.54A:1-1 et seq.) or a refund of an overpayment of taxes attributable to a homestead property tax [rebate] credit pursuant to [P.L.1990, c.61 (C.54:4-8.57 et al.)]P.L. , c. ,(C. )

(now pending before the Legislature as this bill), and at the same time the taxpayer or homeowner shall be indebted to any agency or institution of State Government or for child support under Title IV-A, Title IV-D, or Title IV-E of the federal Social Security Act (42 U.S.C. §601 et seq.), the Department of the Treasury shall apply or cause to be applied the refund [or rebate, or both,]or so much [of either or both] thereof as shall be necessary, to satisfy the indebtedness. Child support indebtedness shall take precedence over all other indebtedness. The Department of the Treasury shall retain a percentage of the proceeds of any collection setoff as shall be necessary to provide for any expenses of the collection effort.

(cf: P.L.1990, c.61,s.11)

12. Section 2 of P.L.1981, c.239 (C.54A:9-8.2) is amended to read as follows:

2. The Department of the Treasury shall promulgate regulations concerning the procedures and methods to be employed by all agencies and institutions in the executive branch in the collection or the setting off of delinquent accounts. The regulations shall be consistent with all federal requirements or limitations regarding any information utilized in any collection or setoff, and shall in addition provide for due notice to the debtor and opportunity for a hearing upon request prior to any setoff; safeguards against the disclosure or inappropriate use of any personally identifiable information regarding the debtor obtained or maintained pursuant to this act; and the appropriate apportionment of any setoff in the case of a debtor's joint filing of a joint income tax return or homestead [rebate] property tax credit application.

(cf: P.L.1981, c.239, s.2)

13. Sections 1 through 10 of P.L.1990, c.61 (C.54:4-8.57 through 54:4-8.66) are repealed.

14. This act shall take effect immediately and apply to taxpayer taxable years commencing on and after enactment.

STATEMENT

This bill repeals the provisions of the "Homestead Property Tax Rebate Act of 1990" and converts that separately paid rebate system into a gross income tax credit for property taxes paid and rent attributable to property taxes paid. The credit is to be claimed against a taxpayer's gross income tax liability and may be refunded as part of any other gross income tax refund. Those residents that are not required to file a gross income tax return will be able to obtain an identical refundable homestead property tax credit.

"Homestead Property Tax Credit Act;" requires homestead property tax rebate be provided as a refundable gross income tax credit.