SECTION 1.  Chapter 59 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after section 5M, the following new section: -

Section 5N. (a) For purposes of this section, the following words shall have the following meaning, unless context clearly requires otherwise:

“Base tax,” means the property tax due on qualified principal residence at the time a city or town accepts this section. If the qualified person did not qualify or did not own an eligible residence when this section was adopted, “base tax” means the maximum property tax due on the qualified residence for the year in which the person became a qualified person under this section. If a qualified person reapplies after acquiring a new residence or after a period of ineligibility, the base tax shall be recalculated for the year of reapplication and reestablishment of eligibility;

“Improvement,” means any change to a dwelling or dwelling lot that would properly warrant a change by the assessor in the assessed value of the property for the year or portion of the year in which the improvement is made;

“Qualified person,” means an elderly or disabled individual who receives: (1) old-age, survivors, and disability insurance benefits under 42 USC chapter 7, section 402; (2) pension disbursements or any benefits from the retirement system under sections 5, 6, 7 or 26 of chapter 32; or (3) any other form of fixed income that does not exceed the weighted average of the median household income for the sixty-five years of age to seventy-four years of age group, as reported by the department of revenue. Said person shall not receive any supplemental income from any source, notwithstanding public relief or transitional assistance of any kind.

“Qualified principal residence” means a principal residence, as defined in section 1 of chapter 188, in which a fifty-one (51) percent or greater interest is vested in one or more qualified persons.

(b) Notwithstanding any law to the contrary under this chapter, upon acceptance of this section by a city or town, the property taxes due on the residential property used as the principal residence shall be the lesser of: (1) the actual tax due; or (2) the base tax.

(c) The base tax shall be adjusted to reflect any percentage increase in the value of the property determined by the assessor to be attributed to improvements made or discovered after the time the base tax was established.