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HB5407 / File No. 148 1
General Assembly File No. 148
February Session, 2026 House Bill No. 5407
House of Representatives, March 24, 2026
The Committee on Veterans' and Military Affairs reported
through REP. FOSTER of the 57th Dist., Chairperson of the
Committee on the part of the House, that the bill ought to pass.
AN ACT CONCERNING STATE REIMBURSEMENT TO
MUNICIPALITIES FOR REVENUE LOST DUE TO THE PROPERTY TAX
EXEMPTION FOR VETERANS WITH A ONE HUNDRED PER CENT
PERMANENT AND TOTAL DISABILITY RATING.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) ( Effective January 1, 2027 ) On or before July first, 1
annually, the assessor of each municipality shall certify to the Secretary 2
of the Office of Policy and Management, on a form furnished by said 3
secretary, the amount of tax revenue which such municipality, except 4
for the provisions of subdivision (83) of section 12 -81 of the general 5
statutes, would have received for the assessment year ending 6
immediately preceding. Any municipality which neglects to transmit to 7
said secretary such claim and supporting documentation as required by 8
this section shall forfeit two hundred fifty dollars to the state, provided 9
said secretary may waive such forfeiture in accordance with procedures 10
and standards adopted by regulation in accordance with chapter 54 of 11
the general statutes. Said secretary shall review each such claim as 12
provided in section 12 -120b of the general statutes. Any claimant 13
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aggrieved by the results of the secretary's review shall have the rights of 14
appeal as set forth in section 12 -120b of the general statutes. The 15
secretary shall, on or before December fifteenth, annually, certify to the 16
Comptroller the amount due each municipality under the provisions of 17
this section, including any modification of such claim made prior to 18
December fifteenth, and the Comptroller shall draw an order on the 19
Treasurer on the fifth business day following and the Treasurer shall 20
pay the amount thereof to such municipality on or before the thirty-first 21
day of December following. If any modification is made as the result of 22
the provisions of this section on or after the December fifteenth 23
following the date on which the assessor has provided the amount of 24
tax revenue in question, any adjustments to the amount due to any 25
municipality for the period for which such modification was made shall 26
be made in the next payment the Treasurer shall make to such 27
municipality pursuant to this section. For the purposes of this section, 28
"municipality" means a town, city, borough, consolidated town and city 29
or consolidated town and borough. 30
This act shall take effect as follows and shall amend the following
sections:
Section 1 January 1, 2027 New section
VA Joint Favorable
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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Resources of the General Fund GF - Cost None At Least 20
million
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 27 $ FY 28 $
All Municipalities Revenue
Gain
None See Below
Explanation
The bill results in a cost to the General Fund of at least $ 20 million
beginning in FY 28 to reimburse municipalities for property tax revenue
lost due to the property tax exemption for veterans with a disability
rating of one hundred percent deemed permanent and total by the U.S.
Department of Veterans Affairs1. The bill results in a revenue gain of at
least $20 million to municipalities that have lost revenue because of the
exemption.
Municipalities’ reimbursements will be subject to a $250 forfeiture to
the extent that municipalities do not submit a claim with proper
documentation to the Secretary of the Office of Policy and Management
and the secretary enforces the forfeiture.
1 The total impact will potentially be higher, dependent on the number of qualifying
veterans, the number of spouses of deceased qualifying veterans, and the value of the
property that is being exempted.
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The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the amount of property tax revenue
lost as a result of the exemption.
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OLR Bill Analysis
HB 5407
AN ACT CONCERNING STATE REIMBURSEMENT TO
MUNICIPALITIES FOR REVENUE LOST DUE TO THE PROPERTY
TAX EXEMPTION FOR VETERANS WITH A ONE HUNDRED PER
CENT PERMANENT AND TOTAL DISABILITY RATING.
SUMMARY
This bill establishes a process for municipalities to receive
reimbursement from the Office of Policy and Management (OPM) for
lost revenue from the property tax exemption for veterans who have
been determined by the United States Department of Veterans Affairs
to have a 100% service -connected permanent and total disability (a
“100% P&T disability”). Existing law fully exempts from property tax a
primary dwelling or motor vehicle for each of these veterans.
The bill requires each municipality’s assessor , by July 1 annually, to
certify to the OPM secretary, on a form created by the secretary, the
amount of tax revenue the municipality would have received for the
immediately preceding assessment year if not for this property tax
exemption. The bill requires the secretary to review claims and certify
to the comptroller the amount due to a municipality. The comptroller
must draw an order on the treasurer and the treasurer must pay the
municipality.
Under the bill, a municipality that fails to certify or submit
supporting documents to the OPM secretary must pay $250 to the state
as a penalty. The bill permits the secretary to waive the penalty through
a procedure in existing law (see BACKGROUND).
The bill applies to a municipality, which under the bill, is a town, city,
borough, consolidated town and city, or consolidated town and
borough.
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EFFECTIVE DATE: January 1, 2027
STATE REIMBURSEMENT PROCESS
The bill requires the OPM secretary to review each claim under
existing procedures for reviewing certain other property tax exemptions
and tax relief and grant programs (which includes provisions about
notice, modifications, reconsideration, and hearings) . Under the bill,
claimants aggrieved by the results of the secretary ’s review can appeal
to court.
The bill requires the secretary to certify to the comptroller, by
December 15 annually, the amount due to each municipality, including
any modification of claim s made before December 15. T he bill also
requires the comptroller to draw an order on the treasurer five business
days after. Under the bill, the treasurer must pay the amount required
to the municipality before the following December 31.
Modifications
Under the bill, i f any modification is made , beginning on the
December 15 after the assessor provided the amount of tax revenue, the
treasurer’s next payment to the municipality under the bill must be
adjusted.
BACKGROUND
Penalty Waiver Procedure
By law, the OPM secretary can waive a penalty if he receives a written
application for the waiver within 30 business days after the relevant
reimbursement claim ’s filing date. Th e application must explain the
reason for the waiver request and be signed by the official responsible
for filing the claim and the chief executive officer of the municipality or
the district. The failure to file must be for reasonable cause and not
intentional or due to neglect. Some examples of reasonable cause
include:
1. acts of God,
2. vacancies in the position of the official responsible for filing the
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claim within 60 days of the claim filing date,
3. failure to deliver the claim despite a reasonable attempt to make
timely delivery, and
4. administrative or technical problems.
COMMITTEE ACTION
Veterans' and Military Affairs Committee
Joint Favorable
Yea 21 Nay 1 (03/10/2026)