The proposed bill modifies the statewide education property tax system by establishing a new Uniform Statewide Education Property Tax (USWEPT) rate, which will be set to generate $378 million annually starting in 2027, an increase from the previous target of $363 million. The bill mandates that municipalities collect and remit USWEPT revenues quarterly to the Department of Revenue Administration (DRA) for deposit into the education trust fund, which will exclusively fund education grants and property tax relief for low- and moderate-income homeowners. Additionally, the bill includes provisions for annual increases of 2% to the tax amount and revises the eligibility criteria for the low- and moderate-income homeowners property tax relief program, including raising household income limits and adjusting property value factors for rebates.

Furthermore, the legislation introduces new requirements for informing taxpayers about their rights to apply for tax relief and mandates the DRA to mail current tax forms by May 1 each year. A committee will be established to study the effectiveness of the property tax relief program, focusing on extending relief to tenants and analyzing the relationship between household income, property values, and property taxation. The bill also imposes a cap on payments at $30 million in total and $1,100 per claimant, with eligibility based on the final tax bill date. Overall, the changes aim to enhance the funding structure for education while providing necessary support to eligible homeowners, although the fiscal impact on state expenditures remains indeterminate due to the potential expansion of the Local and Municipal program.

Statutes affected:
Introduced: 76:3, 76:8, 76:11-a, 198:39, 198:57
HB1787 text: 76:3, 76:8, 76:11-a, 198:39, 198:57