BILL 35

An Act to Amend the Real Property Tax Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1Section 5 of the Real Property Tax Act, chapter R-2 of the Revised Statutes, 1973, is amended

(a)in subsection (6) by striking out "Notwithstanding subsection (1), no taxes are payable" and substituting "Notwithstanding paragraph (1)(a), no tax imposed under paragraph (1)(a) is payable";

(b)by adding after subsection (9) the following:

5(10)Each year the Minister of Municipalities, Culture and Housing shall calculate the average of the rates of tax for that year fixed under paragraph 4(a) for all of the local service districts in the Province.

5(11)Notwithstanding paragraph (2)(c), where in a year the rate of tax fixed under section 4 for real property within a local service district or a rural community exceeds the average rate of tax for that year under subsection (10) and the real property is registered under the farm land identification program, the amount of tax that is the difference between the tax imposed under paragraph (2)(c) on that real property for that year calculated at the rate fixed under section 4 and the tax that would be imposed on that real property for that year if the tax were calculated based on the average rate under subsection (10) is not payable in respect of that real property for that year.

5(12)Subsections (7) to (9), 12(1.2) and 14(5) and the regulations in respect of the farm land identification program apply with the necessary modifications for the purposes of subsection (11).

5(13)Notwithstanding paragraph (2)(a), where in a year the rate of tax referred to in paragraph (2)(a) for real property within a municipality exceeds the average rate of tax for that year under subsection (10) and the real property is registered under the farm land identification program, the Minister of Agriculture and Rural Development may pay for that year on behalf of the person in whose name the real property is assessed the amount of tax that is the difference between the tax imposed under paragraph (2)(a) on that real property for that year calculated at the rate referred to in paragraph (2)(a) and the tax that would be imposed on that real property for that year if the tax were calculated based on the average rate under subsection (10).

5(14)Subsections (7) to (9), 12(1.2) and 14(5) and the regulations in respect of the farm land identification program apply with the necessary modifications for the purposes of subsection (13).

5(15)The amount of a payment under subsection (13) bears interest from the date of the payment at the rate prescribed by regulation for a penalty under subsection 10(3).

5(16)The amount of a payment under subsection (13) and any interest on that amount under subsection (15) that are due and unpaid constitute a debt due to the Crown in right of the Province from the person in whose name the real property is assessed, are payable on demand by the Minister of Agriculture and Rural Development and may be recovered by action in the name of the Crown in right of the Province in any court of competent jurisdiction.

5(17)Subject to the approval of the Lieutenant-Governor in Council, the Minister of Agriculture and Rural Development may at any time discontinue payments under subsection (13).

5(18)Subsection (13) does not apply where the municipality in which the real property is located collects the tax under subsection 6(2).

2Section 11 of the Act is amended

(a)by adding after subsection (1) the following:

11(1.01)Where the amount of any payments under subsection 5(13) and any interest on that amount under subsection 5(15) are due and unpaid, such amount and interest constitute a lien on the real property in respect of which the payments are made, and such lien ranks equally with a lien under subsection (1) and does not require registration or filing to preserve it.

(b)in subsection (1.1) by striking out "except a lien under subsection (1)" and substituting "except liens under subsections (1) and (1.01)";

(c)in subsection (2) in the portion preceding paragraph (a) by striking out "subsections (1) and (1.1)" and substituting "subsections (1), (1.01) and (1.1)";

(d)in subsection (3) by striking out "the amount of a lien imposed under subsection (1) constitutes" and substituting "the amount of the liens imposed under subsections (1) and (1.01) constitutes".

3Section 11.1 of the Act is amended

(a)by adding after subsection (1) the following:

11.1(1.1)Where an apportionment is made under subsection (1), the Minister may apportion any of the debt remaining unpaid with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15) upon the parts of the real property referred to in subsection (1) in proportion to their relative assessed values as determined from the assessment and tax roll at the date of the notice given by the Minister under subsection (1), and such apportionment shall be final and conclusive for all purposes.

(b)by adding after subsection (4) the following:

11.1(5)The amount of the debt that is apportioned under subsection (1.1) and which remains unpaid constitutes a lien on the real property to which it is apportioned, and such lien shall be deemed to be a lien constituted under subsection 11(1.01).

4Section 12 of the Act is amended

(a)in subsection (4.1) by striking out "subsections 11(1) and (1.1)" and substituting "subsections 11(1), (1.01) and (1.1)";

(b)in subsection (5) by adding ", any amount of payments under subsection 5(13) and any interest on that amount under subsection 5(15) that are due and unpaid" after "taxes and penalties mentioned in subsection (3)";

(c)in subsection (5.6)

(i)by striking out "and" at the end of paragraph (b);

(ii)by adding after paragraph (b) the following:

(b.1)the amount of payments under subsection 5(13) and any interest on that amount under subsection 5(15) that are due and unpaid, and

(d)in paragraph (11)(b)

(i)by striking out "and" at the end of subparagraph (i);

(ii)by adding after subparagraph (i) the following:

(i.1)debt remaining unpaid with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15), and

5Section 13 of the Act is amended

(a)by adding after paragraph (2)(c) the following:

(c.1)all sums paid by the purchaser toward payment of the debt with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15),

(b)in subsection (4)

(i)by striking out "and" at the end of paragraph (c);

(ii)by adding after paragraph (c) the following:

(c.1)any of the debt remaining unpaid with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15) in respect of such real property, and

(iii)in paragraph (d) by striking out "(2)(a), (b), (c)" and substituting "(2)(a), (b), (c), (c.1)";

(c)in subsection (9) by striking out "the amount under paragraph (4)(c)" and substituting "the amounts under paragraphs (4)(c) and (c.1)".

6Subsection 14(4) of the Act is repealed and the following is substituted:

14(4)Notwithstanding subsection (3), the liens constituted under subsections 11(1) and (1.01) continue to be a first charge on the real property with respect to taxes imposed in the year in which the sale is held and payments made under subsection 5(13) in the year in which the sale is held.

7Subsection 14.1(3) of the Act is amended by adding after paragraph (c) the following:

(c.1)all sums paid by the purchaser toward payment of the debt with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15),

8Section 15 of the Act is amended by striking out "subsections 11(1) and (1.1)" and substituting "subsections 11(1), (1.01) and (1.1)".

9Paragraph 16(1)(a) of the Act is amended

(a)by striking out "and" at the end of subparagraph (i);

(b)by adding after subparagraph (ii) the following:

(ii.1)the debt remaining unpaid with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15), and

10Section 20 of the Act is amended

(a)in subsection (1) by striking out "all taxes and penalties due to the Province in respect of real property are a first charge" and substituting "the sum of all taxes and penalties due to the Province in respect of real property and any debt due to the Province with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15) in respect of real property is a first charge";

(b)in subsection (3) by adding "and the amount of the debt" after "the total taxes and penalties";

(c)by repealing subsection (4) and substituting the following:

20(4)Upon notification under subsection (3), the insurer shall pay to the Minister the full amount of the taxes and penalties and the amount of the debt referred to in subsection (1) on real property subject to the rights of any mortgagee under subsection (1), but if the amount the insurer is liable to pay under the policy is insufficient to pay those amounts, the insurer shall pay to the Minister the full amount for which the insurer is liable under the policy.

(d)in subsection (5) by adding "and the amount of the debt referred to in subsection (1)" after "the taxes and penalties";

(e)in subsection (5.1)

(i)in the portion preceding paragraph (a) by adding "and the amount of the debt" after "the taxes";

(ii)by striking out "and" at the end of paragraph (a);

(iii)by adding after paragraph (a) the following:

(a.1)there is no unpaid debt with respect to the amount of the payments under subsection 5(13) and any interest on that amount payable under subsection 5(15), and

(f)in subsection (6) by adding "and the amount of the debt" after "the taxes and penalties".

11Subsection 21(1.01) of the Act is amended by striking out "subsection 5(6)" and substituting "subsections 5(6) and (11)".

12This Act shall be deemed to have come into force on January 1, 1998.

EXPLANATORY NOTES

Section 1

(a)The existing provision is as follows:

5(6)Notwithstanding subsection (1), no taxes are payable in respect of real property registered under the farm land identification program established pursuant to the regulation, subject to the terms and conditions prescribed by regulation.

(b)The amendments provide for additional benefits under the farm land identification program.

Section 2

(a)A lien is constituted in relation to amounts paid on behalf of owners of real property registered under the farm land identification program. The lien ranks equally with a lien under subsection 11(1) of the Real Property Tax Act.

(b)The amendment is consequential on the amendment made in paragraph 2(a) of this amending Act. The existing provision is as follows:

11(1.1)Where the tax imposed by a municipality under paragraph 5(2)(a) is due and unpaid, such tax and any penalties with respect to such tax payable under this Act constitute a lien in favour of the municipality on the real property in respect of which such tax is imposed or for which such tax is owing and such lien has priority over every claim, lien, except a lien under subsection (1), privilege or encumbrance of any person and does not require registration or filing to preserve it.

(c)The amendment is consequential on the amendment made in paragraph 2(a) of this amending Act. The existing provision is as follows:

11(2)Each year after a date to be fixed by regulation any mortgagee, judgment creditor or other person having any lien, charge or encumbrance upon or against any real property to which are attached liens under subsections (1) and (1.1)

(a)may pay the amount of such liens;

(b)may add such amount to his mortgage, judgment or other security; and

(c)has the same rights and remedies for such amount as are contained in his security.

(d)The amendment is consequential on the amendment made in paragraph 2(a) of this amending Act. The existing provision is as follows:

11(3)Where real property is sold under any order of foreclosure or sale, execution or other legal process or a power of sale under a debenture or mortgage or under subsection 44(1) of the Property Act, the amount of a lien imposed under subsection (1) constitutes a first charge on the proceeds of the sale, the amount of a lien imposed under subsection (1.1) constitutes a second charge on the proceeds of the sale and no deed, except a deed under section 14, is to be delivered until the liens are satisfied.

Section 3

(a)Where an apportionment of taxes and penalties is made under subsection 11.1(1) of the Real Property Tax Act upon parts of real property, the Minister of Finance may apportion any of the debt remaining unpaid with respect to the amount of the payments under the new subsection 5(13) of the Real Property Tax Act and any interest on that amount payable under the new subsection 5(15) of the Act upon the parts of the real property.

(b)A lien is constituted in relation to the amount of any debt apportioned under the new subsection 11.1(1.1) of the Real Property Tax Act.

Section 4

(a)The amendment is consequential on the amendment made in paragraph 2(a) of this amending Act. The existing provision is as follows:

12(4.1)Where notice has been given under subsection (4), the Minister may, at any time prior to the sale of the real property under subsection (3), postpone the sale, but the liens on the real property under subsections 11(1) and (1.1) shall not be discharged by such postponement.

(b)The existing provision is as follows:

12(5)Where taxes and penalties mentioned in subsection (3) and all costs of any sale proceedings to the date of payment are paid to the Minister at any time prior to the sale under subsection (3), the sale is not to be held.

(c)(i)The amendment is consequential on the amendment made in subparagraph 4(c)(ii) of this amending Act. The existing provision is as follows:

12(5.6)A person who has entered into an agreement under subsection (5.1) shall not sell real property referred to in subsection (3) for less than the total of....

(b)all taxes and penalties due and unpaid, other than the tax imposed by a municipality under paragraph 5(2)(a) and the penalties with respect to such tax where the Minister did not approve a request by the municipality under subsection 12.1(2) before any proceeding was instituted under this section, and

(c)(ii)Where a sale of real property is held under the Real Property Tax Act by a person who has made an agreement with the Minister of Finance to carry out such sale on behalf of the Minister, the sale price of the real property must include the amount of any payments made under the new subsection 5(13) of the Act and any interest on that amount under the new subsection 5(15) of the Act.

(d)(i)The amendment is consequential on the amendment made in subparagraph 4(d)(ii) of this amending Act. The existing provision is as follows:

12(11)All money received as the proceeds of any sale of real property under this Act is to be disbursed in the following order or priority:....

(b)second, in pro rata payment of all

(i)tax arrears and penalties, other than those pertaining to the tax imposed by a municipality under paragraph 5(2)(a) where the Minister did not approve a request by the municipality under subsection 12.1(2) before any proceeding was instituted under this section, and

(d)(ii)The distribution of the proceeds of a sale of real property under the Real Property Tax Act is to include any payments made under the new subsection 5(13) of the Act and any interest on that amount under the new subsection 5(15) of the Act.

Section 5

(a)Where a person applies for redemption of real property sold at a sale under the Real Property Tax Act, the purchaser at the sale must certify to the Minister of Finance, in addition to other amounts specified in the Act, all sums paid by the purchaser toward payment of the debt with respect to the amount of the payments under the new subsection 5(13) of the Act and any interest on that amount payable under the new subsection 5(15) of the Act.

(b)(i)The amendment is consequential on the amendment made in subparagraph 5(b)(ii) of this amending Act. The existing provision is as follows:

13(4)Where within one month of receipt of the advice under subsection (3) or (3.1) the applicant under subsection (1) pays to the Minister....

(c)any taxes and penalties remaining unpaid in respect of such real property, other than the tax and penalties that a municipality collects under subsection 6(2) where the Minister did not approve a request by the municipality under subsection 12.1(2) before any proceeding was instituted under section 12, and....

less the sums described under paragraph (2)(e) as contained in the advice under paragraph (3)(c) or subsection (3.1), the Minister shall issue a receipt to the applicant for such amounts as evidence of the redemption of the real property.

(b)(ii)An applicant for redemption of real property sold at a sale under the Real Property Tax Act must pay, in addition to other amounts specified in the Act, any debt remaining unpaid with respect to the amount of the payments under the new subsection 5(13) of the Act and any interest on that amount under the new subsection 5(15) of the Act.

(b)(iii)The amendment is consequential on the amendment made in subparagraph 5(b)(ii) of this amending Act. The existing provision is as follows:

13(4)Where within one month of receipt of the advice under subsection (3) or (3.1) the applicant under subsection (1) pays to the Minister....

(d)the sums described under paragraphs (2)(a), (b), (c) and (d) as contained in the advice under paragraph (3)(c) or subsection (3.1),

less the sums described under paragraph (2)(e) as contained in the advice under paragraph (3)(c) or subsection (3.1), the Minister shall issue a receipt to the applicant for such amounts as evidence of the redemption of the real property.

(c)The amendment is consequential on the amendment made in subparagraph 5(b)(ii) of this amending Act. The existing provision is as follows:

13(9)With the exception of the amount under paragraph (4)(c), all money paid to the Minister under subsection (4) is to be paid to the purchaser at the sale when he delivers to the Minister all policies of insurance insuring his interest in the real property, properly assigned to the applicant.

Section 6

The amendment is consequential on the amendment made in paragraph 2(a) of this amending Act. The existing provision is as follows:

14(4)Notwithstanding subsection (3), the lien constituted under subsection 11(1) continues to be a first charge on the real property with respect to taxes imposed in the year in which the sale is held.

Section 7

Where the Minister of Finance sets aside a sale of real property under the Real Property Tax Act for error, irregularity or other cause, the purchaser at the sale must certify to the Minister, in addition to other amounts specified in the Act, all sums paid by the purchaser toward payment of the debt with respect to the amount of the payments under the new subsection 5(13) of the Act and any interest on that amount payable under the new subsection 5(15) of the Act.

Section 8

The amendment is consequential on the amendment made in paragraph 2(a) of this amending Act. The existing provision is as follows:

15When real property is sold under this Act and the sale is set aside for error, irregularity or other cause, the liens on such real property under subsections 11(1) and (1.1) are not discharged and the real property may again be sold as provided in this Act.

Section 9

(a)The amendment is consequential on the amendment made in paragraph 9(b) of this amending Act. The existing provision is as follows:

16(1)Where a sale is held under section 12, the Minister may purchase the real property at such sale if:

(a)he bids no more than the total of

(i)the expenses of advertising and sale, and....

(b)If the Minister of Finance purchases real property at a sale under the Real Property Tax Act, the amount of the Minister's bid is to include an amount for the debt remaining unpaid with respect to the amount of the payments under the new subsection 5(13) of the Act and any interest on that amount payable under the new subsection 5(15) of the Act.

Section 10

(a)The existing provision is as follows:

20(1)Except where a policy of insurance has been effected and is maintained by a mortgagee solely for the mortgagee's own protection or where the Minister has notified the insurer under subsection (5.1) or subsection (6), all taxes and penalties due to the Province in respect of real property are a first charge upon any money payable under a policy of insurance on improvements on such real property and, where the real property is located in a municipality and the Minister collects the tax imposed by the municipality under paragraph 5(2)(a) and any penalties with respect to such tax for and on behalf of the municipality, all tax and penalties due to the municipality in respect of the real property are a second charge upon any money payable under a policy of insurance on improvements on such real property.

(b)The amendment is consequential on the amendment made in paragraph 10(a) of this amending Act. The existing provision is as follows:

20(3)Within ten days after being notified under subsection (2), the Minister shall notify the insurer of the total taxes and penalties referred to in subsection (1) on the real property affected by the loss by sending a notice by registered mail or a facsimile of the notice by telephone transmission.

(c)The amendment is consequential on the amendment made in paragraph 10(a) of this amending Act. The existing provision is as follows:

20(4)Upon notification under subsection (3), the insurer shall pay to the Minister the full amount of the taxes and penalties referred to in subsection (1) on real property subject to the rights of any mortgagee under subsection (1), but if the amount the insurer is liable to pay under the policy is insufficient to pay the full amount of the taxes and penalties referred to in subsection (1), the insurer shall pay to the Minister the full amount for which he is liable under the policy.

(d)The amendment is consequential on the amendment made in paragraph 10(a) of this amending Act. The existing provision is as follows:

20(5)Nothing in subsection (4) shall be construed to increase the amount payable under a policy of insurance and the payment of the taxes and penalties by the insurer shall reduce the amount payable under the policy to the insured or his assignee.

(e)(i) to (iii)The amendments are consequential on the amendment made in paragraph 10(a) of this amending Act. The existing provision is as follows:

20(5.1)Notwithstanding subsections (3) to (5), the Minister may notify the insurer that the insurer is not liable to pay the taxes referred to in subsection (1) if

(a)there are no tax arrears on the real property with respect to the taxes referred to in subsection (1), and

(b)the notice under subsection (2) is received by the Minister on a date when a discount would be allowed if the taxes referred to in subsection (1) were paid on that date.

(f)The amendment is consequential on the amendment made in paragraph 10(a) of this amending Act. The existing provision is as follows:

20(6)Notwithstanding subsections (3) to (5), where real property is damaged or destroyed as a result of an event for which the Government of the Province or the Government of Canada has declared a state of emergency and the extent of the damage or destruction to the real property is ten thousand dollars or more, the Minister may notify the insurer that the insurer is not liable to pay the taxes and penalties referred to in subsection (1).

Section 11

The existing provision is as follows:

21(1.01)Where real property registered under the farm land identification program is damaged or destroyed, adjustments in the amount of tax which is imposed in the year in which the damage or destruction occurs and which would be due and payable in that year but for subsection 5(6), are to be made in accordance with the regulations.

Section 12

Commencement provision.

Chapter Outline Update

Section 1

(a) and (b)Strike out the entry for s.5(6), (7), (8), (9) and substitute the following:

Farm land identification program 5(6)-(18)

Section 2

(a)Strike out the entry for s.11(1), (1.1) and substitute the following:

Liens 11(1), (1.01), (1.1)

(b) to (d)No change required.

Section 3

(a) and (b)Strike out the entry for s.11.1 and substitute the following:

Apportionment 11.1

Sections 4, 5, 6, 7, 8, 9

No change required.

Section 10

(a)No change required.

(b)Strike out the entry for s.20(3) and substitute the following:

Notice to insurer respecting amounts payable 20(3)

(c) to (e)Strike out the entry for s.20(4)-(5.1) and substitute the following:

Payment of amounts by insurer 20(4)-(5.1)

(f)Strike out the entry for s.20(6) and substitute the following:

Waiver of payment 20(6)

Section 11

Add after s.21(1) the following:

Adjustment in taxes respecting damage or destruction
of real property registered under the farm land
identification program 21(1.01)

Section 12

No change required.

Endorse: Hon. Doug Tyler


Last Modified: 12:08pm , January 29, 1998