SENATE, No. 299

STATE OF NEW JERSEY

217th LEGISLATURE

PRE-FILED FOR INTRODUCTION IN THE 2016 SESSION

Sponsored by:

Senator  JOSEPH F. VITALE

District 19 (Middlesex)

SYNOPSIS

     Provides for fair notice and opportunity to contest, or obtain waiver of a repayment of, overpayment of homestead rebate or credit and homestead property tax reimbursement.

CURRENT VERSION OF TEXT

     As introduced.

An Act providing for fair notice and an opportunity to contest, or obtain a waiver of a repayment of, an overpayment of a homestead rebate or credit and a homestead property tax reimbursement, amending P.L.1999, c.63 and P.L.1997, c.348.

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

     1.  Section 15 of P.L.1999, c.63 (C.54:4-8.66b) is amended to read as follows:

     15.  a.  Any person who receives a homestead rebate or credit otherwise authorized under this act but which the director determines has been paid in error, other than under the circumstances provided in section 16 of P.L.1999, c.63 (C.54:4-8.66c), and which is recoverable by the director, and fails to return the payment within [45] 90 days of receiving a written notice from the director that such payment was erroneous, shall pay, in addition to the amount of the erroneous rebate or credit, interest at the rate prescribed in R.S.54:49-3, assessed for each month or fraction thereof, compounded annually at the end of each year, from the date next following the [45th] 90th day after receiving the notice from the director that such payment was erroneous until the date of the return of the erroneous payment.

     b.  The notice provided by the director to the claimant or the claimant's representative shall provide a written determination which provides sufficient information for the claimant to understand the factual and legal basis for the determination, how and when to contest the determination, the potential interest that may be due on the erroneous overpayment, and provide the claimant with a reasonable opportunity to be heard to contest the determination of the director before any action is taken by the director to recover the payment.  The notice shall clearly state that the claimant may request that the director allow a waiver of the recovery of an erroneous payment, that the director shall consider whether the repayment would be contrary to principles of equity, and that the director shall provide the claimant with a written determination on the waiver request before any action is taken by the director to recover the payment.

(cf: P.L.2007, c.62, s.30)

     2.  Section 16 of P.L.1999, c.63 (C.54:4-8.66c) is amended to read as follows:

     16.  a.  A homestead rebate or credit , determined by the director to have been paid as a result of the claimant's intentional misrepresentation or paid in error due to the claimant's withholding of any material fact in obtaining the rebate or credit, and any penalties and interest as imposed thereon by this act, shall be payable to and recoverable by the director in the same manner as a tax deficiency assessment with respect to the payment of a State tax in accordance with the State Uniform Tax Procedure Law, R.S.54:48-1 et seq. 

     b.  Prior to any action by the director to recover an amount payable pursuant to this section, a claimant or the claimant's representative, shall be provided with written notice of the determination of the director which provides sufficient information for the claimant to understand the factual and legal basis for the determination, and of the claimant's opportunity to file a protest of the findings of the director in accordance with R.S.54:49-18 and rights of appeal thereunder.

(cf: P.L.2007, c.62, s.31)

     3.  Section 3 of P.L.1997, c.348 (C.54:4-8.70) is amended to read as follows:

     3.    An application for a homestead property tax reimbursement hereunder shall be filed with the director annually on or before June 1 of the year following the year for which the claim is being made and shall reflect the prerequisites for a homestead property tax reimbursement on December 31 of the tax year for which the claim is being made; provided, however, that the director may, by rule, designate a later date as the date by which the application shall be filed or waive the requirement for filing an annual application for any year or years subject to any limitations and conditions the director may deem appropriate.  The application shall be on a form prescribed by the director and provided for the use of applicants hereunder.  Each applicant making a claim for a homestead property tax reimbursement under this act shall provide, if required by the director, to the director a copy of his or her current year property tax bill or current year site fee bill on the homestead constituting that person's principal residence and a copy of his or her property tax bill for the base year or site fee bill for the base year on the same homestead, or other equivalent proof as permitted by the director.

     It shall be the duty of every eligible claimant to inform the director of any change in his or her status or homestead which may affect his or her right to continuance of the homestead property tax reimbursement.

     If the director determines that an eligible claimant [receives] received an additional homestead property tax reimbursement to which the claimant was not entitled or an amount of homestead property tax reimbursement greater than the reimbursement to which the claimant was entitled, and that the claimant has not misrepresented or withheld any material fact in obtaining the reimbursement, the director shall provide to the claimant or the claimant's representative a written determination which provides sufficient information for the claimant to understand the factual and legal basis for the determination, how and when to contest the determination, the potential interest that may be due on the erroneous overpayment, that the director may, in addition to all other available legal remedies, offset such amount against a gross income tax refund or a homestead rebate or credit amount due pursuant to P.L.1990, c.61 (C.54:4-8.57 et seq.), and shall provide the claimant with a reasonable opportunity to be heard to contest the determination of the director before any action is taken by the director to recover the payment.  The notice shall clearly state that the claimant may request that the director allow a waiver of the recovery of an erroneous payment, that the director shall consider whether the repayment would be contrary to principles of equity, and that the director shall provide the claimant with a written determination on the waiver request before any action is taken by the director to recover the payment.

     Prior to any action by the director to recover an amount of a homestead property tax reimbursement pursuant to this section that the director has determined was paid based upon a finding that the claimant misrepresented or withheld any material fact in obtaining the reimbursement, a claimant, or the claimant's representative, shall be provided with written notice of the determination of the director which provides sufficient information for the claimant to understand the factual and legal basis for the determination, and of the claimant's opportunity to file a protest of the findings of the director in accordance with R.S.54:49-18 and rights of appeal thereunder.

(cf: P.L.2003, c.30, s.1)

     4.  This act shall take effect immediately.

STATEMENT

     This bill provides for a fair system to allow recipients of overpayments of homestead rebates or credits and homestead property tax reimbursements, to contest the overpayment, or seek a waiver of the overpayment, when the overpayment is made without any fault of the recipient.  The bill describes the notice that must be provided by the Director of the Division of Taxation in the Department of the Treasury to the recipient explaining the right to contest an overpayment, and the right to request a waiver of the repayment when the recipient has not misrepresented or withheld any material fact in obtaining the reimbursement. In those circumstances, the bill also allows for a waiver of the recovery of an erroneous payment that the director must consider if the repayment would be contrary to principles of equity.  

     The bill also provides that the recipient has the right to file a protest of a finding by the director that the overpayment must be repaid where there is a finding that the claimant misrepresented or withheld any material fact in obtaining the payments.  After losing a contest concerning the overpayment in these circumstances, the bill allows a claimant to file a protest as is allowed by law currently when a State taxpayer files a protest against a State tax deficiency assessment.