‘An Act To Protect Homeowners Affected by Tax Lien Foreclosure’
Amend the bill by striking out the title and substituting the following:
Amend the bill by striking out everything after the enacting clause and before the summary and inserting the following:
‘Sec. 1. 36 MRSA §942, as amended by PL 2009, c. 489, §§2 and 3, is further amended by inserting after the 4th paragraph a new paragraph to read:
Within 30 days after recording a tax lien certificate in the registry of deeds for property that constitutes a homestead for which a property tax exemption is claimed under subchapter 4-B, the municipal treasurer shall provide written notice to the person named on the tax lien mortgage that that person may be eligible to file an application for tax abatement under section 841, subsection 2, indicating that the municipality, upon request, will assist the person in requesting an abatement and provide information regarding the procedures for making such a request. The notice must also indicate that the person may seek assistance from the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection regarding options for finding an advisor who can help the person work with the municipality to avoid tax lien foreclosure and provide information regarding ways to contact the bureau. The Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection, by July 15th annually, shall provide to a statewide organization representing municipalities information regarding assistance in avoiding tax lien foreclosure to assist municipalities in providing the information required in the notice.
Sec. 2. 36 MRSA §943-C is enacted to read:
§ 943-C. Sale of homesteads formerly owned by persons 65 years of age or older
Notwithstanding any provision of law to the contrary, after the foreclosure process under sections 942 and 943 or sections 1281 and 1282 is completed and the right of redemption has expired, if a municipality chooses to sell property that immediately prior to foreclosure was eligible for a property tax exemption as a homestead under subchapter 4-B, the municipality shall notify the former owner or owners of the right to require the municipality to use the sale process under subsection 3 if the former owner or owners demonstrate that the property meets the requirements of subsection 1.
1. Subject property. Property is subject to the requirements of this section if:
A. Immediately prior to foreclosure the property was owned by at least one person who, on the date the tax lien certificate was filed, was 65 years of age or older and occupied the property as a homestead as defined in section 681, subsection 2; and
B. The former owner or owners of the property demonstrate to the municipality that:
(1) The income, as defined in section 5219-KK, subsection 1, paragraph D, of residents of the property was less than $40,000 for the calendar year immediately preceding the calendar year in which the right of redemption expired; and
(2) The value of liquid assets of the residents of the property is less than $50,000 in the case of a single individual or $75,000 in the case of 2 or more individuals. For the purposes of this subparagraph, "liquid assets" means something of value available to an individual that can be converted to cash in 3 months or less and includes bank accounts, certificates of deposit, money market or mutual funds, life insurance policies, stocks and bonds, lump-sum payments and inheritances and funds from a home equity conversion mortgage that are in the individual's possession whether they are in cash or have been converted to another form.
2. Notification; appeal. A municipality required to provide the notification required under this section shall notify the former owner or owners of the right to require the sale process described in subsection 3 at least 90 days prior to listing the property for sale and provide an application form with instructions for the former owner or owners to apply for the sale process described under subsection 3 and to provide the information necessary for the municipality to determine whether the former owner or owners meet the conditions required under subsection 1. The former owner or owners must be allowed at least 30 days to submit the required form and information. The municipality, within 30 days after receiving the required form and information, shall notify the former owner or owners whether they have been determined to be eligible for the sale process described in subsection 3 and provide the former owner or owners the right to appeal a negative decision. The State Tax Assessor shall prepare forms and instructions that must be used by municipalities to inform former owners of their right to apply for the sale process provided under subsection 3.
3. Sale process requirements. If a municipality determines that the former owner or owners meet the conditions specified under subsection 2, the municipality shall:
A. List the property for sale with a real estate broker licensed under Title 32, chapter 114 that is not employed by the municipality;
B. Sell the property at fair market value or the price at which the property is anticipated by the real estate broker to sell within 6 months after listing; and
C. Pay to the former owner or owners any proceeds from the sale in excess of:
(1) The sum of tax owed;
(2) Property taxes that would have been due on the property during the period following foreclosure when the property is owned by the municipality;
(3) Interest;
(4) Fees, including real estate broker's fees; and
(5) Any other expenses incurred by the municipality in making the sale or maintaining the property.
4. Effect of inability to contract or sell property. If a municipality is unable to contract with a real estate broker for the sale of the property as described in subsection 3 or the broker cannot sell the property within 6 months after listing, the municipality may treat the property in the same manner as other property acquired through foreclosure.
5. Property in the unorganized territory. With regard to the sale of property acquired by the State through tax lien foreclosure in the unorganized territory, the State Tax Assessor has the obligations of a municipality under this section.
Sec. 3. 36 MRSA §1281, as amended by PL 1991, c. 846, §12, is further amended by inserting at the end a new paragraph to read:
Within 30 days after recording a tax lien certificate in the registry of deeds for property that constitutes a homestead for which a property tax exemption is claimed under chapter 105, subchapter 4-B, the State Tax Assessor shall provide written notice to the owner named on the tax lien mortgage that that owner may be eligible to file an application for tax abatement under section 841, subsection 2, indicating that the State Tax Assessor, upon request, will assist the owner in requesting an abatement and provide information regarding the procedures for making such a request. The notice must also indicate that the owner may seek assistance from the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection regarding options for finding an advisor who can help the owner work with the State Tax Assessor to avoid tax lien foreclosure and provide information regarding ways to contact the bureau. The Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection, by July 15th annually, shall provide to a statewide organization representing municipalities and to the State Tax Assessor information regarding assistance in avoiding tax lien foreclosure to assist municipalities and the State Tax Assessor in providing the information required in the notice.
Sec. 4. Appropriations and allocations. The following appropriations and allocations are made.
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF
Revenue Services, Bureau of 0002
Initiative: Provides funding to reimburse municipalities for 90% of the cost of selling property that has been acquired through tax lien foreclosure.
| GENERAL FUND | 2017-18 | 2018-19 |
|
All Other
|
$0 | $825,255 |
 |
|
|
| GENERAL FUND TOTAL | $0 | $825,255 |
SUMMARY
This amendment replaces the bill and requires a municipal treasurer or the State Tax Assessor, with regard to property in the unorganized territory, within 30 days after recording a tax lien certificate in the registry of deeds to notify the person named on a tax lien mortgage of the right to apply for an abatement and the availability of assistance in applying for an abatement from the municipal treasurer or the State Tax Assessor. The amendment also requires that the notification include information about the availability of assistance to avoid tax lien foreclosure from the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection.
The amendment also provides a process that must be used by municipalities that choose to sell property that has been acquired through tax lien foreclosure if the property was formerly eligible for a homestead exemption and was owned by a person who was 65 years of age or older and meets income and assets guidelines. Under this process the municipality must use an independent real estate broker, sell the property for fair market value or the price at which the independent broker thinks the property will sell within 6 months and return the net proceeds of the sale to the former owner after deduction of the municipality's costs.
The amendment also provides funding to municipalities to cover state-mandated costs.
FISCAL NOTE REQUIRED
(See attached)