AGENDA ITEM #6B
November 19,2013
Action
MEMORANDUM
November 15,2013
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative
Attomey~
Action: Bill 5-13, Property Tax Credit - Accessibility Features
...­
Government Operations and Fiscal Policy Committee recommendation (2-0): enact Bill
5-13 with amendments.
Bill 5-13, Property Tax Credit - Accessibility Features, sponsored by Councilmember Leventhal,
was introduced on February 5, 2013. A public hearing was held on February 26 at which all
speakers, including a representative of the Executive, supported Bill 5-13. A Government
Operations and Fiscal Policy Committee worksession was held on October 14.
Bill 5-13 would provide for a property tax credit for an accessibility feature installed on an
existing residence. The state law that authorizes this credit is shown on ©13. Howard County
enacted a similar credit on October 1, 2012. See ©15 for a memorandum from the Executive
supporting Bill 5-13, which he notes complements an initiative Executive staff have been
working on to increase the supply of housing with "Design for Life" features.
Issues/Committee recommendation
Legislative mandate
Disability advocate Jackie Simon urged the Council to legislatively
mandate accessibility standards (©48-49). Although that discussion may be a worthwhile one for
the relevant committee of jurisdiction, such a legislative mandate is outside the scope of Bill
13.
Executive amendments
On June 21, the Executive transmitted amendments to Bill 5-13.
These amendments would:
• provide a tax credit for a new single-family residence that meets a Level I or Level II
accessibility standard;
• cap the credit for a Level 1 accessibility standard at $3,000 less credit received
against the Development Impact Tax for School Improvements;
• cap the credit for a Level 2 accessibility standard at $10,000 less credit received
against the Development Impact Tax for School Improvements;
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• cap the total amount of credits granted at $500,000 per year;
• provide for a graduated credit against school impact taxes depending on the
percentage of residences built that meet Level 1 accessibility standards;
Percentage of residences
that meet Levell
accessibility standards
5%
10%
25%
30%
Credit per residence
I
$500
$1,000
$1,500
$2,000
I
• require a seller to disclose to a home buyer the availability of property tax credits for
accessibility improvements; and
• make technical and clarifying changes to Bill 5-13.
The Committee recommended (2-0, Councilmember Ervin temporarily absent):
support the Executive amendments.
School impact tax credit amount
As discussed above, the Executive amendments would
provide a school impact tax credit on a graduated basis, depending on the percentage of homes
that are built with Level 1 accessibility features. The Commission on People with Disabilities,
while supportive of Bill 5-13 in general, argues that a $500 credit would not entice a builder to
include these features. Rather than use a sliding scale, the Commission urged a set credit amount.
Disclosure to new homebuyers
As noted above, the Executive amendments would
require a seller to disclose to a home buyer the availability of property tax credits for
accessibility improvements. In its testimony, the Greater Capital Area Association of Realtors
(GCAAR) supported Bill 5-13 but raised concerns about the potential disclosure requirement. In
subsequent correspondence, GCAAR noted that this will require changes to new home contracts
and questioned if the information that is required in the disclosure (a description of the types of
improvements for which the credits are available and an estimate of the amount of credit) will be
provided by the County. At the worksession, Executive staff stated that they would be working
with affected stakeholders to implement this provision.
New issue for Council Discussion: After the worksession, Robert Kaufman, on behalf of
the Maryland National Capital Building Industry Association, raised concerns with the disclosure
language in the Executive amendments.
Mr.
Kaufman noted the BIA's support of the concept of
disclosure, but sought language to ensure that the disclosure focused on general costs and
features since the accessibility options are nearly limitless. Council staff recommends the
Council adopt the following amendment on ©2, lines 11-13:
ill
The disclosure must include
[[~
description
01]]
Mneral information about the
types of improvements for which the credits are available and an estimate of the
[[amount of credit]] general cost to make the improvements.
2
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This language would address Mr. Kaufman's concerns and still provide meaningful
information to potential buyers. For examples, under this language, sellers could provide
information similar to these examples:
1. The typical visitability requirements range from $xx - $xx with a credit of $xx and
$xx.
2.
The typical fully accessible home can range from $xx - $xx with a credit of
between $xx and $xx.
3.
Check with your builder to find out if an elevator option is available.
Compatibility with the Zoning Ordinance
Council Senior Legislative Analyst Linda
McMillan noted that in some zones, including the CR zones, public benefit points "that allow
increased density are awarded for units with interiors that satisfy American National Standards
Institute A 117.1 Residential Type A standards (or an equivalent County standard). Council staff
questions whether a builder should be allowed to obtain both public benefit points for additional
density and take advantage of the available tax credits. The tax credits are available only for
single-family homes and the vast majority of dwelling units in the CR zones would be multi­
family homes. Therefore, the overlap is limited.
Committee recommendation
(2-0,
Councilmember Ervin temporarily absent): amend Bill 5-13 to ensure that an applicant does not
receive both public benefit points and the tax credit simultaneously. This language is on
©1O,
lines 245-247.
This packet contains:
Committee Bill 5-13
Legislative Request Report
State law
Executive memorandum
Fiscal and Economic Impact Statement
Executive amendments
Select correspondence
County Executive
Commission on Aging
Commission on People with Disabilities
GCAAR
Jackie Simon
Circle
#
1
12
13
15
18
22
42
44
46
47
48
F:\LAW\BILLS\1305 Property Tax Credit Accessibility Features\Action Memo.Doc
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Bill No. ______
..!:!-.2=-~
__-,----:-_
Concerning: Property Tax Credit ­
Accessibility Features
2
Revised:
10/22/2013
Draft No.
Introduced:
February 5, 2013
Expires:
August 5,2014
Enacted: ___________________
Executive: _____________
Effective: __________________
Sunset Date: _--:-____--:-_______
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember Leventhal
AN
ACT to:
(1)
(2)
provide for a property tax credit for an accessibility feature installed on an existing
residence; [[and]]
provide for g
prQp¥-rty
fQr
meeting g Level
I
or Level
!!
~~~~
standard on g
~~
residence:
against the Development hnpact
School hnprovements
g Level! accessibility standard: and
generally amend County law regarding property tax credits.
Ql
ill
By adding
Montgomery County
Chapter
~
Real Property
Section 40-12D
Chapter 52, Taxation
[[Section]] Sections
52-18T~ ~_~
!b;
amending
Montgomery County Code
Chapter
~
Taxation
Section 52-93
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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1
Sec.
1.
[Section] Sections 40-12D. 52-18T and 52-18U [is] are added and
Section 52-93 is amended as follows:
40-12D. Disclosure of availability of property tax credits for accessibility
improvements.
2
3
4
5
W
Before the buyer signs
~
contract for the purchase of a new single-
6
7
8
family residential real property in the County, the seller must disclose
to each prospective buyer that
~
real property tax credit may be
available to the buyer for the cost of installing accessibility features or
the cost of Level! or Level II accessibility standards to the property as
defined in 52-18UCa).
9
10
11
12
au
The disclosure must include
~
description of the
~
of
improvements for which the credits are available and an estimate of
the amount of credit.
(£l
A seller or the seller's agent is not liable for any incorrect information
13
14
15
16
17
18
19
disclosed under this Section if the seller or the seller's agent relied in
good faith on information provided
~
the County to describe the
credit or to estimate the amount of the credit.
52-18T. Property Tax Credit
=
Accessibility Features
ill
Definitions.
In
this Section, the following terms have the meaning
20
21
indicated.
Department
means the Department of [[Finance]] Permitting Services.
Director
means the Director of the Department or the Director's
22
23
designee.
Eligible costs
means costs that are:
24
25
ill
ill
incurred within 12 months before the property owner submits
an application to the Department for the credit;
for
~
feature authorized under this Section, including reasonable
costs to install the feature;
26
27
28
(J)
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29
ill
ill
ill
paid
Qy
the applicant and not, or will not be, reimbursed
Qy
any
entity; and
in excess of$500.
30
31
32
33
34
Feature
means g permanent modification to g residence that results in:
g no-step front door entrance with g threshold that does not
exceed
Yz
inch in depth with tapered advance and return
surfaces
Qr,.
35
36
37
38
if g no-step front entrance is not feasible, g no-step
entrance to another part of the residence that provides access to
the main living space of the residence;
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40
41
ill
ill
ill
an installed ramp creating g no-step entrance;
an interior doorway that provides g 32-inch wide or wider
clearing opening;
an exterior doorway that provides g 36-inch wide or wider clear
opening, but only if accompanied
Qy
exterior lighting that is
either controlled from inside the residence, automatically
controlled, or continuously on;
42
43
44
45
ill
walls around g toilet, tub, or shower reinforced to allow for the
proper installation of grab bars with grab bars installed in
accordance
- - - ­
Americans
- ­
Disabilities
-
Act Standards
with the
with
for Accessible Design;
46
47
48
49
@
maneuvering space of at least 30 inches
Qy
48 inches in g
bathroom or kitchen so that g person using g mobility aid may
enter the room, open and close the door, and operate each
fixture or appliance;
50
51
52
53
54
ill
ill
an exterior or interior elevator or lift
i[Qfll
or stair glide unit;
an accessibility-enhanced bathroom, including g walk-in or roll­
in shower or tub; or
55
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56
57
58
59
60
61
62
63
64
(2)
an alarm, appliance, and control structurally integrated into the
unit designed to assist an individual with
f!
sensory disability.
(Q}
Credit established.
In accordance with Section 9-250 of the
Property article of the Maryland Code, the owner of real property may
receive
f!
property tax credit against the County property tax for
f!
feature that is installed on an existing residence that is the owner's
principal residence when the feature is installed.
(£!
Amount gf Credit.
The tax credit allowed under this Section is
65
66
67
the lesser of:
Uill]](A)
50% of the eligible costs; or
$2,500 less any subsidy received from a governmental.
quasi-governmentaL or non-profit entity for the feature.
Any credit that is received that exceeds the annual tax liability
ofthe property may be carried over to the next tax year.
The credit runs with the property upon the transferof title and
the balance of any credit will be applied to the tax bill of the
subsequent owner of the property.
@
Annual Limit on Amount gfCredits Granted.
[[ill]HID
68
69
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72
73
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75
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77
ill
During any fiscal year, the total of all tax credits granted under
this Section must not exceed $100,000.
ill
Credits must be granted in the order in which the Department
[[receives]] certifies the [[complete applications]]
~~
78
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80
~~~~~
under subsection (e)(3) of this Section.
ill
[[A complete application that, if granted, would cause the limit
set forth in paragraph
81
ill
of this subsection to be exceeded,
82
83
must be granted in the next fiscal year or years and in the order
received.]] A certification of a credit that would cause the limit
@
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84
m subsection (d)(}) of this Section to be exceeded must be
granted in the next tax year or years subject to subsections (c)
and (d)(}) of this Section.
85
86
87
liD
Application (or the Credit.
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89
ill
To receive the credit,
~
property owner must submit an
application to the Department:
(A)
in the format the Department requires;
that includes
feature;
(Q}
~
fQPY
90
91
92
93
all
of the building permit to install the
that includes any document that the Department requires;
and
94
95
.em
ill
on or before the date the Department sets.
~
96
97
98
99
The Department must only accept one application for
credit
under this Section for each property during
~
single tax year.
ill
The Department must certify to the Department of Finance that
the property is eligible for the credit and the amount of the
credit.
100
101
102
103
ill
ill
A property owner may submit an application on or after March
1, 2014 for a credit.
Administration.
104
105
106
107
108
109
110
ill
ill
The County Executive may adopt regulations under Method
ill
-
to administer
-
this Section.
The Department must submit
~
written report to the Council
Qy
October
1
of each year for the preceding fiscal year. The report
must include the following:
(A)
number of applicants;
number of applications approved;
[[income range of applicants;]]
all
(Q}
111
(j)
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112
[[CQ)]]
modification made
by
the applicant;
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114
[[tID
reason for the modification]]
[[®]]
(Q) other sources from which the applicant received
funds or applied for assistance for the modification;
[[(Q)]]
!El
efforts to advertise the credit; and
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117
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119
[[(ill]]
(fJ
any program recommendations.
(g)
Publicity.
The Department must publicize the credit in
~
way designed
to inform those most likely to benefit from the credit.
ili}
120
121
122
Effective Date.
The credit authorized
by
this Section applies to tax
years beginning [[June 30, 2013]] July
1.
2014.
S2-18U. Property Tax Credit:;;;;; Level! and Level II Accessibility Standards
123
124
125
126
W
Definitions.
In this Section. the following terms have the meaning
Department
means the Department of Permitting Services.
Director
means the Director of the Department QI the Director's
127
128
Eligible costs
means costs that are:
incurred within 12 months before the propertYmowner submits
an application to the Department for the credit;
for an accessibility feature authorized under this Section,
including reasonable costs to install the feature;
129
130
131
132
133
134
135
136
ill
ffi
paid by the applicant and not. or will not be. reimbursed by any
entity: and
Accessibilitv Feature
means a permanent addition to a single family
residence that is a requirement under a Level
1
or Level
II
137
138
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139
Levell Accessibility Standard
means a permanent addition to a single
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142
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144
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146
147
148
149
150
151
family residence that include at least one no-step entrance located at
any entry door to the house that is connected to an accessible route to
a place to visit on the entry level. a useable powder room or bathroom,
and a 32 inch nominal clear width interior doors as further defined and
described in Executive Regulations adopted under Method 2.
Levelll Accessibility Standard
means permanent additions to a single
family residence that provide all of the Level I Accessibility Standards
plus an accessible circulation path that connects the accessible
entrance to an accessible kitchen, a full bath, and at least one
accessible bedroom and as is further defined and described in
Executive Regulations adopted under Method 2.
Single family residence
means an attached or detached single family
152
153
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155
156
157
158
home.
(Q)
Credit established.
As authorized by Section 9-250 of the Tax­
Property Article of the Maryland Code, the owner of a single family
residence located in Montgomery County may receive a property tax
credit against the County real property tax for the cost of features that
achieve Level I or Level II Accessibility Standards.
W
Amount of Credit.
The tax credit permitted by this Section will be as
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166
follows:
ill
For features meeting Level I Accessibility Standards, certified
costs of up to $3,000 less any credit received against the
Development Impact Tax for School Improvements under
Section 52-93 for those features and less any funds or
assistance received for the accessibility feature.
ill
For features meeting Level II Accessibility Standards, certified
costs of up to $10,000 less any credit received against the
(jJ
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Development Impact Tax for School Improvements under
Section 52-93 for those features and less any funds or
assistance received for the accessibility feature.
ru
ill
The maximum amount of credit that may be applied in anyone
The amount of credit that may be applied in anyone tax year
must not exceed the amount of County property tax imposed on
ill
Any credit that
IS
granted that
exc~eds
the limit set in
subsection (c)(3) of this Section or exceeds the annual tax
liability of the property may be carried over to the next tax year,
subject to subsection (c)(3) of this Section, until the entire
amount of the credit is applied.
(Q)
The credit runs with the property upon transfer of title and the
balance of any credit will be appliec:lJ9 the tax bill of the
subsequent owner of the property.
(ill
Annual Limit on Amount ofCredits Granted.
ill
During any tax year, the total of all tax credits granted under
this Section must not exceed $500,000.
ill
Credits must be gr.anted in the order in which the Department
certifies the amount of the credit under subsection (e)(3) of this
Section.
ru
A certification of a credit that would cause the limit set forth in
subsection (d)(1) of this Section to be exceeded must be granted
in the next tax year or years subject to subsections (c)(3) and
W
Application for the Credit.
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194
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209
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213
To receIve the credit. a property owner must submit an
application to the Department:
(Al
in the format the Department requires:
that includes a copy of the building permit to install the
feature;
all
a:l
that includes any document that the Department requires:
and
a.:ll
on or before the date set in the regulations.
The Department must only accept one application for a credit
under this Section for each property during a single tax year.
The Department must certify to the Department of Finance that
the property is eligible for the credit and the amount of the
credit.
A property owner may apply for a
2014.
cr~<:lit
on or after March 1,
ill
ill
The County Executive may adopt regulations under Method
(2)
to administer this Section.
The Department must submit a written report to the Council by
October 1 of each year for the preceding tax year. The report
must include the following:
214
215
(Al
number of applicants;
number of applications approved;
modification made by the applicant: and
efforts to promote the credit.
216
217
all
a:l
CD)
218
219
220
W
Publicity.
The Department must p1.l1:>li9ize the credit in a way designed
to inform those most likely to benefit from the credit.
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240
1hl
Effective Date.
The credit authorized by this Section applies to tax
years beginning July 1. 2014.
Sec. 52-93. Credits.'
*
(e)
*
*
ill
A property owner must receive a credit for constructing or
contributing to the cost of building a new single family
residence that meets Level I Accessibility Standards. as defined
in Section 52-18U(a).
ill
The credit allowed under this Section must be as follows:
(Al
If at least 5% of the single family residences built in the
project meet Level I Accessibility Standards. then the
owner must receive a credit of $500 per residence.
all
If at least 10% of the single family residences built in the
project meet Level I Accessibility Standards. then the
owner must receive a credit of $1 .000 per residence.
(kl
If at least 25% of the single family residences built in the
project meet Level I Accessibility Standards. then the
owner must receive a credit of $1 .500 per residence.
a:ll
If at least 30% of the single family residences built in the
project meet Level I Accessibility Standards. then the
241
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245
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247
owner must receive a credit of $2.000 per residence.
ill
Application for the credit and administration of the credit will
be in accordance with the provisions of Subsections 52-18U(e)
and
(0.
ill
A person must not receive a property tax credit under this
Section if the person receives any public benefit points for
constructing units with accessibility features under Chapter 59.
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248
249
The Director of Finance must not provide a refund for a credit which
is greater than the applicable tax.
[(0] (gl
250
251
*
*
*
Approved:
252
253
254
Nancy Navarro, President, County Council
Date
255
Approved:
256
257
258
Leggett, County Executive
Date
259
This is a correct copy o/Council action.
260
261
262
263
M. Lauer, Clerk of the Council
Date
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LEGISLATIVE REQUEST REPORT
Bill 5-13
Property Tax Credit
-
Accessibility Features
DESCRIPTION:
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Bill 5-13 would provide for a property tax credit for an accessibility
feature installed on an existing residence
County residents may need incentives to be able to make accessibility
improvements on their homes.
To provide for the tax credit.
Department of Finance
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, 240-777-7815
To be researched.
n/a
F:\LAW\BILLS\1305 Property Tax Credit Accessibility Features\LEGISLATIVE REQUEST REPORT.Doc
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Page I
. "·N
L
·eXlseXIS
loflDOCUMENT
Annotated Code of Maryland
Copyright
©
2012 by Matthew Bender and Company, Inc., a member of the LexisNexis Group
All rights reserved.
***
Current through all Chapters Effective January 1,2013, of the 2012 General Assembly Regular Session, First
Special Session, and Second Special Session.
***
***
Annotations through November 26,2012
***
TAX - PROPERTY
TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF
SUBTITLE 2. STATEWIDE OPTIONAL
GO TO MARYLAND STATUTES ARCHIVE DIRECTORY
Md. TAX-PROPERTY Code Ann.
§
9-250
(2012)
§ 9-250. Credit for property equipped with accessibility features
(a) "Accessibility feature" defined. -- In this section, "accessibility feature" means:
(I) a no-step entrance allowing access into a residence;
(2) interior passage doors providing at least a 32-inch-wide clear opening;
(3) grab bars around a toilet, tub, or shower installed to support at least 250 pounds;
(4) light switches, outlets, and thermostats placed
in
wheelchair-accessible locations;
(5) lever handles on doors; and
(6) universal design features or any accessibility enhancing design feature prescribed by the Department of
Housing and Community Development under
§
12-202 ofthe Public Safety Article.
(b) In general. -- The Mayor and City Council of Baltimore City or the governing body of a county or of a
municipal corporation may grant, by law, a tax credit against the county or municipal corporation property tax imposed
on residential real property equipped with an accessibility feature.
(c) Amount, duration, criteria, regulations. -- The Mayor and City Council of Baltimore City or the governing body
of a county or of a municipal corporation may provide, by law, for:
(I)
the amount and duration ofthe tax credit under this section;
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Page 2
Md. TAX-PROPERTY Code Ann.
§
9-250
(2)
additional eligibility criteria for the tax credit under this section;
(3)
regulations and procedures for the application and uniform processing of requests for the tax credit; and
(4)
any other provision necessary to carry out the credit under this section.
HISTORY:
2008, ch. 645.
NOTES:
EDITOR'S NOTE. --Section 2, ch. 645, Acts 2008, provides that the act shall take effect June 1,2008.
Section 2, ch. 645, Acts 2008, provides
in
part that the act "shall be applicable to all taxable years beginning after June
30,2008."
Chapters 210, 281, and 645, Acts 2008, all enacted
§
9-248 of this article. The sections enacted by chs. 281 and 645
have been redesignated as
§§
9-249 and 9-250, respectively.
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OFFICES OF THE COUNTY EXECUTIVE
Isiah Leggett
COUtlty
Executive
February 21, 2013
TO:
Nancy Navarro, Council President
FROM:
SUBJECT:
Isiah Leggett, County Executive
~
~
~
Bil15-13, Property Tax Credit -Accessibility Features
I am writing to express my strong support for Councilrnember Leventhal's
initiative to increase the supply of housing that includes features that make homes visitable and
livable ("Design for Life" features). Housing with these features is critically important for many
of our residents including those living with mobility impairments and our seniors, both of
whom experience difficulties in housing with standard designs. We need to take meaningful
steps to remove accessibility barriers that interfere with full use of one's horne.
Introduction of Bill 5-13 coincides with work that I have had Executive staff
doing to create a proposal for incentives and strategies to increase the supply of housing with
Design for Life features. We can no longer rely on volunteer programs to create this stock. I
congratulate Councilrnember Leventhal on providing a proposal to make progress on this
important issue.
The proposals that I would like to see go beyond renovations to existing
dwellings. We need a program that incentivizes both builders and property owners to include
Design for Life features in both existing housing and new construction. To do this requires that
we look at additional incentives, such as impact tax credits. Property tax credits will encourage
the property owner. Impact tax credits will incentivize the development community. We also
need to set the maximum level of available credits high enough to encourage participation.
Therefore the maximum level of available credits should be revisited as needed as we gauge
participation in future years.
We also need a program that will encourage participation by recognizing builders
and designers who participate in creation of homes with Design For Life features. Finally, we
need to make certain that end users have timely notice about the availability of these credits.
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Nancy Navarro, Council President
February 21, 2013
Page 2 of3
I will be sending proposed amendments to Bi1l5-13 and additiolJ.allegislation as
necessary that will have the following elements:
1. A property tax credit with an initial cap of $500,000 that during the first year
alone can accommodate an estimated 250 applicants and that would apply to both
renovation and new construction. This tax credit would have certain adjustments
as reflected on the table below.
2.
An
impact tax credit against school impact taxes for improvements that make a
home visitable and which will be certified pursuant to a program to be developed
by the Department of Permitting Services. The program will provide varying
levels of credit based upon different levels of participation to incentivize greater
levels of developer participation.
3. The program will i) provide levels of certification that will trigger the different
levels of impact tax credits,
ii)
fast-track permits for Design for Life units, iii)
include partnerships to promote the projects and designers who participate in
Design for Life projects, and iv) help raise awareness about the need for and
production of housing with Design for Life features.
4. A requirement that developers and realtors disclose to prospective purchasers of
new homes the availability of property tax credits for Design for Life features if
included in the home.
The credits that are proposed are summarized in the following table:
Type and amount
Property tax (end
user) - Total
$500.000/year
Visitable
Up to $3000 of
certified costs
where there has
not been an
Impact Tax
credit (will
capture tear
down/rebuilds)
5% of units
Ie
Up to $10,000
(less amount of
any impact tax
credit provided
for address due
to visitable
features)
$0
Cap/applicant/annum
$2000
School Impact Tax
(Builder) with
certification that costs
of visitable
improvements are not
passed on to the
purchaser
NA
$500/unit
10% of units ­
$1000lunit .
25% of units ­
$15001unit
30+% of units ­
$20001unit
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Nancy Navarro, Council President
February 21,2013
Page 3 of3
I
am
proposing that the school impact tax credit be utilized for this initiative.
While there are many groups with needs that will be served by housing with DFL features, our
growing senior population, a group that does not typically generate students, will likely be the
largest consumer of housing with DFL features.
My proposal is structured so that developers can take advantage of the credit in a
way that will not compensate them in both the price of the home and the credit. Likewise,
because the definition of visitable includes livable features, I am proposing an adjustment
ranging between $500 to $2000 to the total property tax credit to the extent that a school impact
tax credit has been provided for the unit.
I am optimistic that this multi-pronged approach will enable the County to
increase the stock of housing with DFL features that remove barriers and allow people to remain
in their homes rather than face expensive costs of institutional assisted living or expensive
renovation costs at a later date.
I look forward to working with the Council in a collaborative effort to develop an
effective approach to increase the supply of homes in our County that provide DFL features.
c:
George Leventhal, Councilmember
Joseph Beach, Director, Finance Department
Jennifer Hughes, Director, Office of Management and Budget
Diane Jones, Director, Department of Permitting Services
Betsy Luecking, Staff Liaison, Commission on People with Disabilities and
Commission on Veterans Affairs
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ROCKVIllE, MARYLAND
MEMORANPUM
February 20,2013
TO:
FROM:
Nancy Navarro, President, County Council
Bud~ ~
Joseph F. Beach, Director, Department
ofF~
U
Jennifer
A.
Hughes, Director, Office ofManagement and
Council Bill 5-13. Property Tax Credit - Accessibility Features
Please find attached the fiscal and economic impact statements for the abovewreferenced
SUBJECT:
legislation.
JAH:a2a
c; Kathleen Boucher, Assistant ChiefAdministrative Officer
Lisa Austin, Offices ofthe County Executive
Joy Nurmi, Special Assistant
to
the County Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department ofFinance
Michael Coveyou, Department ofFinance
James Babb, Department ofFinance
Erika Lopez-Finn, Office of Management and Budget
Anita Aryeetey, Office of Management and Budget
Ayo Apollol1, Office of Management and Budget
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Fiscal Impact Statement
Council Bill 5-13 Property Tax Credit - Accessibility Features
1. Legislative Summary.
This legislation offers a tax credit of $2,500 or 50% of eligible costs, whichever is lower,
against the County property tax credit for a feature that is installed on an existing
residence that is the owner's principal residence when the feature is installed. The total
amount oftax credits granted will not exceed $100,000 in any fiscal year.
2.
An
estimate of changes in County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source of information, assumptions, and methodologies used.
There is no revenue associated with this legislation. Expenditures' would be capped at
$100,000 per the legislation.
3.
Revenue and expenditure estimates covering at least the next
6
fiscal years.
There is no revenue associated with this legislation. Expenditure estimates could range
from $0 to $100,000 within each fiscal year.
4.
An
actuarial analysis through the entire amortization period for each bill that would affect
retiree pension or group insurance costs.
This legislation does not affect retiree pension or group insurance costs.
5. Later actions that may affect future revenue and expenditures
if
the bill authorizes future
spending.
This legislation does not authorize future spending.
6.
An
estimate ofthe
staff
time needed to implement the
bill.
It
takes roughly 45 minutes to 1 hour per account of administration time for similar tax
credits. Once implemented, it would take approximately 400 hours annually of staff time
for this program, assuming 400 credits per year. This does not include the
implementation time of setting up the system. It is possible the Department of
Technology Services will be involved in programming the system/tax credit and
importing the file into the Municipal Uniform Information System for collectionlbilling.
7.
An
explanation of how the addition of new staff responsibilities would affect other duties.
New increased staff duties would include application processing for the tax credit. Staff
would have to reprioritize other duties as assigned.
@
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8.
An
estimate of costs when an additional. appropriation
is
needed.
No additional appropriation would be needed.
9. A description of any variable that could affect revenue and cost estimates.
A key variable would include the number of tax credit applications for processing. This
figure could range from 40 to 400 applications, but costs would vary depending on the
amount ofthe
tax
credit claimed.
10. Ranges ofrevenue or expenditures that are uncertain: or difficult to project.
This legislation places a $100,000 cap on credits issued each year.
In
the event that.
credits applied for exceed this ant{)unt, they' are to be credited for the next fiscal year. It
would be possible for a backlog of credits to occur in future fiscal years; however under
the proposed legislation, these credits would not cost the County more than $100,000
each fiscal year. It is possible backlogs ofpayments could accrue over multiple fiscal
years.
11.
If
a bill is likely to· have no fiscal impact, why that is the case.
This legislation will have a fiscal impact of $100,000 annually.
12. Other fiscal impacts or comments.
None.
13. The following contributed to and concurred With this analysis:
Erika Lopez-Finn, Office ofManagement and Budget
Mike Coveyou, Department of Finance
James Babb, Department of Finance
Date
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Economic Impact Statement
Bill 5-13, Property Tax Credit - Accessibility Features
Background:
This legislation would provide for a property tax credit for an accessibility feature
installed in an existing residence.
1.
The sources of information, assumptions, and methodologies used.
• Assume that the majority ofthe "features" will be eligible for the $2,500
maximum tax credit, as the cost of the majority of the features willlik.ely exceed
the maximum credit.
• Assume that the full extent ofthe credit program will be used ($100,000 per year).
2.
A description of any variable that could affect the economic impact estimates.
• Ifthe average credit is very low (the
minimum
is
$250) the impact could be less
than
the maximum total allowed, annually.
• If
the number of requests for the credit is low then the maximum total credits
allowed may not be met. At $2,500/credit, there would be 40 credits per year
available under the $100,000 program limit. At $2S0/credit there would be 400
credits available each year.
3.
The Bill's positive or negative effect, if any on employment, spending, saving,
investment, incomes, and property values in the County.
• The bill may result in de minimis work for home contractors
in
the future, as it
may
act
as an incentive for homeowners to make some of the accessibility
modifications that are eligible for credits.
• It may also result
in
slightly higher resale values for homes that are modified to
make them more accessible.
• Both impacts are expected to be very minor as the annual credit allowed a
homeowner
is
capped
and
it is expected that the homeowner will choose to have
modifications made that will result in a high payback from the credit.
4.
If
a Bill
is
likely to have no economic impact, why is that the case?
• Not applicable
5.
The following contributed to and concurred with this analysis: David
Platt and
Mike Coveyoll,
Finance.
~b,::!:ctoI~
Department of Finance
.
Page
1
ofl
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c:::;
~-...)
W
.:.....
:2::
c:
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
:"'~
.J;:::
Isiah Leggett
, County Executive
-::'
June 21,2013
--i
r;-~)
-<
V'I
a
To:
From:
Subject:
Nancy Navarro, Council President
Isiah Leggett, County
Executiv~-""--
Recommended Amendments to Bill 5-13, Property Tax Credits - Accessibility
In follow-up to my memorandum dated February 21, 20l3, I am pleased to attach
proposed amendments to Bill 5-13, Property Tax Credits - Accessibility. These amendments
build upon the tax credit for accessibility features that is contained in Bill 5-13 and establish a '
Design for Life (DFL) program that incentivizes renovation of existing homes and the creation
and purchase ofhomes that are equipped with features that make them both visitable and livable.
Revised Fiscal Impact and Economic Impact Statements that reflects these recommended
.
changes are also attached.
Per my February 21 memorandum, these amendments include:
• A property tax credit with an initial cap of$500,000 that during the first year
alone can accommodate an estimated
250
applicants and that would apply to
both renovation and new construction;
• An
impact tax credit against school impact taxes for improvements that make
a horne visitable and which will be certified pursuant to a program to be
developed by the Department of Permitting Services;
• Varying levels of credit based upon different levels ofparticipation to
incentivize greater levels of developer participation; and
• Disclosure requirements to inform end users ofthe availability of the credits
and incentivize purchase of accessibility features when a horne is under
construction.
In addition to establishing tax credits for Level I and Level II Accessibility
(respectively, visitable and livable improvements), the amendments include technical and
clarifying changes that the County Attorney discussed with the bill's sponsor, Council member
George Leventhal.
In my recommended FY14 Operating Budget I included funds for the Department
of Permitting Services (DPS) to hire a consultant to help establish, implement, brand and market
the program.
2.2
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Nancy Navarro, Council President
June 21,2013
Page 2 of2
I look forward to working with the County Council on the adoption and
implementation of this program that will increase our stock of accessible housing.
It
is my hope
that this program will be a national model in which we can all take great pride in a noteworthy
achievement.
If you have any questions, please feel free to contact DPS Director Diane Jones at
(240)777-6363.
Attachments (3)
c:
Joseph Beach, Director, Finance Department
Kathleen Boucher, Assistant Chief Administrative Officer
Jennifer Hughes, Director, Office of Management and Budget
Diane Jones, Director, Department of Permitting Services
Betsy Luecking, Staff Liaison, Commission on People with Disabilities and
Commission on Veterans Affairs
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Bill No.
5-13
Concerning: Property Tax Credit ­
Accessibility Features
Revised:
1/25/2013
Draft
No.
Introduced:
February 5,2013
Expires:
August 5.2014
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _ _ _ _ _ _ _ __
Ch. _ _,
Laws
of
Mont.
Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember Leventhal
AN
ACT to:
(1)
(2)
ill
ill
provide for a property tax credit for an accessibility feature installed on an existing
residence; [[and]]
meeting
~
Level
I
or
II
accessibility
provide for
~
property tax credit
~
singk family residence:
a:a4
standard
provide for an impact
credit against the Development Impact
For Public
School Improvements for meeting a Level
I
accessibility
and
generally amend County law regarding property tax credits.
By adding
Montgomery County Code
PropertY
Chapter
~
Section 40-12D
Chapter 52, Taxation
[[Section]] Sections 52-18T.! 52-18U
amending
Montgomery County Code
Chapter
~
Taxation
Section
Boldface
Underlining
[Single boldface brackets]
Double uodedining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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1
Sec.
1.
[Section] Sections 40-12D, 52-18T and 52-18U [is] are added and
Section 52-93 is amended as follows:
40-12D. Disclosure of availability of property tax credits for accessibility
improvements.
2
3
4
5
6
7
W
Before
buyer signs
~
contract for the purchase of a new single-
property in
County, the seller
credit may
disclose
family resi dential
prospective buyer that
~
real property
available to the buyer
;;;,;===
8
9
10
11
the cost of installing accessibility features or
II accessibility standards to
property as
of
I
the
=
cost
=
Level
=
~~
defined in 52-18U(a).
ail
The disclosure must include
~
description of the
~
improvements for which the credits are available
th~
12
an estimate
13
14
15
16
17
18
19
amount of credit.
seller~
s
seller or the
agent is
liable for any incorrect information
disclosed under
Section if the seller or the seller's agent relied
the County to describe the
good faith on information provided
credit
to estimate the amount ofthe credit.
52-18T. Property Tax Credit
=
Accessibility Features
{ill
Definitions.
In this Section, the following terms have the meaning
20
21
indicated.
Department
means the Department of [[finance]] Permitting Services.
Director
means the Director of the Department or the Director's
22
23
24
25
designee.
Eligible costs
means costs that are:
ill
ill
incurred within 12 months before
property owner submits
26
27
28
an application to the Department for the credit;
for
£!:
feature authorized under this Section, including reasonable
costs to install the feature;
2
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29
30
31
ill
ill
paid
Qy
the applicant and not, or will not be, reimbursed
Qy
any
entity; and
in excess of$500.
32
33
34
Feature
means
~
permanent modification to
~
residence that results in:
ill
~
no-step front door entrance with
~
threshold that does not
exceed Y2 inch in depth with tapered advance and return
surfaces or, if
~
no-step front entrance is not feasible,
~
no-step
entrance to another part of the residence that provides access to
the main living space of the residence;
35
36
37
38
39
40
41
42
ill
ill
ill
an installed ramp creating
~
no-step entrance;
an interior doorway that provides
~
32-inch wide or wider
clearing opening;
an exterior doorway that provides
~
36-inch wide or wider clear
opening, but only if accompanied
Qy
exterior lighting that is
either controlled from inside the residence, automatically
controlled, or continuously on;
43
44
45
ill
walls around
~
toilet, tub, or shower reinforced to allow for the
proper iristallation of grab bars with grab bars installed in
accordance with the Americans with Disabilities Act Standards
for Accessible Design;
46
47
48
49
®
maneuvering sIJace of at least 30 inches
Qy
48 inches
in
~
.
bathroom or kitchen so that
~
person using
~
mobility aid may
enter the room, open and close the door, and operate each
fixture or appliance;
50
51
52
53
54
ill
ill
an exterior or interior elevator or
lift
[Qf.ll
or stair glide unit;
an accessibility-enhanced bathroom, including
~
walk-in or roll­
in shower or tub; or
55
3
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56
57
58
ill
(hl
an alarm, appliance, and control structurally integrated into the
unit designed to assist an individual with
9:
sensory disability.
Credit established.
In accordance with Section 9-250 of the Tax­
Property article of the Maryland Code, the owner ofreal property may
receive
9:
property tax credit against the County property tax for
9:
feature that is installed on an existing residence that is the owner's
principal residence when the feature is installed.
59
60
61
62
63
64
65
66
W
Credits.~
ill
Amount
Q[
Credit.
The tax credit allowed under this Section is
the lesser of:
[[ill]]
CA)
50% of the eligible costs; or
$2,500 less any subsidy received from a governmentaL
auasi.,-governmental, or non-profit entity for the feature.
67
68
69
. [[ill]]®
ill
ill
Any credit that is receivedthat exceeds the annual tax liability
of the property may be carried over to the next tax year.
The credit runs with the property upon the transfer oftitle and
the balance of any credit will be applied to the tax bill of the
subsequent owner of the property.
70
71
72
73
74
75
@
Annual Limit on Amount
Q[
Credits Granted.
ill
During any fiscal year, the total of all tax credits granted under
this Section must not exceed $100,000.
76
77
78
79
ill .
Credits must be granted in the order in which the Department
[[receives]]certifies the [(complete applications]] amount of the
credit under subsection (e)C3) of this Section.
80
81
ill
[[A
complete application that, if granted, would cause the limit
set forth in paragraph
ill
of this subsection to be exceeded,
must be granted in the next fiscal year or years and
in
the order
received.]]-A-
~ertification
of g credit that would cause the limit
4
82
83
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84
set
must be
subsection (d)(1)
in the next tax
subsections
W
to be exceeded,
~
85
86
87
88
89
subject to
(d)(l) clthis Section.
ill
Application for the Credit.
ill
To
the credit.
~
property owner must submit an
application to the Department:
90
91
92
93
94
95
96
97
98
99
100
CA)
ill.)
the format the Department requires;
includes
~ ~
ofthe building permit to install the
feature;
(Q
that.includes any document that the Department requires;
and
on or before the date
Department sets.
one application for
~
during
~
single
-==-::;-=..;;
ill
Department must only
under this Section for each
year.
ill
The Department must certify to the Department of Finance that
the property is eligible for the credit and the amount of the
101
102
103
104
105
106
107
108
109
110
ill
A property owner may submit an application on or after March
1, 2014 for a credit.
ill
Administration.
ill
ill
County Executive may adopt regulations under Method
ill
to administer this Section.
Department must submit
~
written report to the Council by
October
1
of each
~
for the preceding fiscal year.
must include the following:
report
CA)
ill.)
{Q
number of applicants;
number of applications approved;
[[income range of applicants;]]
5
111
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112
113
114
[[CD)]]
modification made
Qy
the applicant;
[[®
reason for the modification]]
[[®HCD)
other sources from which the applicant received
the modification;
funds or applied for assistance
[[CQ}]]!E1
efforts
115
116
117
118
119
advertise the credit; and
[[ililJlill
(g}
any program recommendations.
Publicity.
The Department must publicize the credit in
f!
way designed
to inform those most likely to benefit from the credit.
120
121
122
123
124
125
126
ill
Effective Date.
The creditauthorized
Qy
this Section applies to tax
years beginning [[June 30,2013]] July L 2014 ..
52-lSU. Property Tax Credit;;;; Levell and Level
n
Accessibility Standards
W
Definitions.
In this Section, the following terms have the meaning
indicated.
Department
means the Department of Permitting Services.
Director
means the Director of the Department or the Director's
designee.
Eligible costs
means costs that are:
incurred within 12 months before the propertvowner submits
an application to the Department for the credit:
127
128
129
. 130
131
132
133
134
135
136
137
ill
ill
for an accessibility feature authorized under this Section,
including reasonable costs to install the feature:
paid by the applicant and not. or will not be, reimbursed by any
entity: and
in excess of $500.
Accessibility Feature
means a permanent addition to a single family
residence that is a requirement under a Level I or Level II
Accessibility Standard:
138
6
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139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
Level
I
Accessibilitv Standard
means pennanent additions to a single
family residence that include at least one no-step entrance located at
any entry door to the house that is connected to an accessible route to
a place to visit on the entry leveL a useable powder room or bathroom,
and a 32 inch nominal clear width interior doors as further defined and
described
in
Executive Regulations adopted under Method 2.
Lepel
II
Accessibility Standard
means pennanent additions to a single
familv residence that provide all of the Level I Accessibilitv Standards
plus ,!n accessible circulation path that connects the accessible
entrance to an accessible
kitch~n.
a full bath. and at least one
accessible bedroom and as is further defined and described in
Executive Regulations adopted under Method 2.
Single family residence
means an attached or detached single family
home.
tiil
Credit established.
As authorized by Section 9-250 of the Tax­
Propertv Article of the Maryland Code. the owner of a single family
residence located in Montgomery Countv may receive a propertv tax
credit against the Countv real propertv tax for the cost of features that
achieve Level I or Level II Accessibility Standards. .
i£l
Amount of Credit.
The tax credit pennitted by this
follows:
S~ction
will be as
ill
For features meeting Level I Accessibilitv Standards, certified
costs of up to $3,000 less any credit received against the
Development Impact Tax for. School Improvements under
Section 52-93 for those features and less any funds or
assistance received for the accessibility feature.
ill
For features meeting Level II Accessibilitv Standards. certified
costs of up to $10.000 less any credit received against the
7
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167
168
169
170
171
172
173
174
175
176
177
Development Impact Tax· for School Improvements under
Section 52-93 for those features and less any funds or
assistance received for the accessibility feature.
ill
ill
The maximum amount of credit that may be applied in anyone
tax year is $2,000.
The amount of credit that may be applied in anyone tax year
may not exceed the amount of County property tax imposed on
the property in that year.
ill
Any credit that is granted that exceeds the limit set in
subsection (c)(3) of this Section or exceeds the annual tax
liability of the property may be carried over to the next tax year,
subject to the limit set forth in subsection (c)(3) of this Section,
until the entire amount of the credit is applied.
178
179
180
181
ill
The credit runs with the property upon transfer of title and the
balance of any credit will be applied to the tax bill of the
subsequent owner of the property.
182
183
!£U
Annual Limit on Amount ofCredits Granted.
During any tax year. the total of all tax credits granted under
this Section must not exceed $500,000.
184
185
186
187
188
ill
Credits must be granted in the order in which the Department
certifies the amount of the credit
und~r
subsection (e)(3) of this
Section.
189
190
191
192
193
~
ill
A certification of a credit that would cause the limit set forth in
subsection (d)(1) of this Section to be exceeded, must be
granted in the next tax vear or years subject to the limitations
ien subsections (c)(3) and (d)(1) of this Section.
Application for the Credit.
8
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194
195
196
197
198
199
200
201
202.
203
204
205
206
207
208
209
210
211
ill
To receIve the credit, a property owner must submit an
application to the Department:
ill
Qil
(Q
in the format the Department requires;
that includes a copy of the building permit to install the
feature:
that includes any document that the Department requires:
and
!Ill
ill
ill
on or before the date set in the regulations.
The Department must onlv accept one application for a credit
under this Section for each property during a single tax year.
The Department must certify to the Departmen1 of Finance that
the propertY is eligible for the. credit and the amount of the
credit..
ill
ill
A propertY owner may apply for a credit on or after March
1,
Administration.
ill
ill
The County Executive may adopt regulations under Method (2}
to administer this Section.
The Department must submit a written report to the Council
by
. October 1 of each year for the preceding tax vear. The report
must include the following:
(A)
number of applicants;
number of applications approved:
modification made by the applicant: and
212
213
214
215
216
217
218
219
220
Qil
!Ill
ig)
efforts to promote the credit.
Publicity.
The Department must publicize the credit in a way designed
to inform those most likely to benefit from the credit.
9
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221
222
Lhl
Effective Date.
The credit authorized by this Section applies to tax
years beginning July 1,2014.
Sec. 52-93. Credits.
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230
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233
(a)
(b)
(c)
(d)
(e)
*
*
*
*
*
*
*
*
*
*
*
*
Level I Accessibili!J: Standards Credit.
Credit established. A property owner must receive a credit for
. constructing or contributing to the <:;gst of building a new single
family residence that meets Level I Accessibili!J: Standards. as
defined in Section 52-18U(a).
fll
The amount of the credit. The credit allowed under this section
will be as follows:
234
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239
ill
If at least 5% of the single family residences built in the
project meet Level I Accessibility Standards, then the
owner must receive a credit 0[$500 per residence.
au
!k)
Ifat least 10% of the single family residences built in the
proiect meet Level I Accessibility
Standard~,
then the
240
241
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243
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245
246
owner must receive a credit of$1.000 per residence.
If at least 25% of the single family residences built in the
project meet Level I Accessibility Standarci§, then the
owner must receive a credit of $1.500 per residence.
a:u
If at least 30% of the single family residences built in the
proiect meet Level I Accessibilitv Standards. then the
owner must receive a credit of $2,000 per residence.
10
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247
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ill
Application for the credit and administration of the credit will
be in accordance with the provisions of Subsections 52-18UCe)
and Ct).
ill
The Director of Finance must not provide a refund for a credit which
is greater than the applicable tax.
[(t)]
(g}
* * *
254
255
256
257
Approved:
Nancy Navarro, President, County Council
Date
258
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261
Approved:
Isiah Leggett, County Executive
Date
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266
This is a correct copy o/Council action.
Linda M. Lauer, Clerk of the Council
Date
11
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Fiscal Impact Statement
Council BillS-13 Property Tax Credit - Accessibility Features
1. Legislative Summary.
The proposed amendments to Council Bi115-13 detail the Design for Life program that
encourages builders and property O\VIlers to include accessibility features in both existing
housing and new construction. The amendments use property tax credits to encourage
property O\VIlers to include accessibility features and schools impact tax·credits to
incentivize the development community.
Multiple
tax
credits are offered. The first property tax credit included in the original bill
is $2,500 or 50% of eligible costs, whichever is lower, against the County property tax
credit for an accessibility feature that is installed on an existing residence that is the
o\VIler's principal residence when the feature is installed. During any fiscal year, the total
of all tax credits granted in the County under this provision must not exceed $100,000.
The
Bill
stipulates that DPS accept only one application for a credit for each property
during a single ta'{ year.
The County Executive proposes a second tax credit, which is a credit against schools
impact taxes for improvements that make a home "Visit-Able" (Level I Accessibility)
and which will be certified pursuant to a program to be developed by the Department of
Permitting Services. The program will provide varying levels of credit based upon
different levels of participation to encourage greater levels of developer participation. If
at least 5% of the houses built in a given project meet Level I Standards, then the O\VIler
must receive a credit of $500 per house meeting the standards. The credits escalate based
on the percentage of homes built meeting Level I Accessibility Standards according to
the following schedule: 5% of units, $500 per unit; 10% of units, $1,000 per unit; 25% of
units, $1,500 per unit; 30+% of units, $2,000 per unit.
The amendments include another property
tax
credit for achieving two accessibility tiers
for single family homes with up to $3,000 in property tax credits for improvements to
create Level I Accessibility Standards, or a "Visit-Able Home", and up to $10,000 for
improvements to create Level II Accessibility Standards, or a "Live-Able Home.':
Multiple credits for the same improvements are prohibited. Both credits for each Level of
Accessibility Standard are less any school impact tax credit granted for the
improvements. Although a tax credit of up to $10,000 may be achieved, the maximum
amount of credit that may be applied in anyone ta'{ year to the O\VIlers of the property is
$2,000 with an annual overall program cap of $500,000. In the first fiscal year, an
estimated 250 applicants can be accommodated. All authorized credits apply to tax years
.
beginning July 1,2014.
2. An estimate of changes in County revenues and expenditures regardless of Vvnether the
revenues or expenditures are assumed in the approved budget. Includes source of
information, assumptions, and methodologies used.
Property tax credits would be capped at $100,000 per the legislation for Section 52-18T
Property Tax Credit - Accessibility Features and $500,000 for Section 52-18U Property
Tax Credit Level I and Level II Accessibility Standards. Assuming the County's property
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tax revenues remain at the Charter Limit, there would be no loss of property tax revenues
to the County. There is no cap for school impact tax credits.
It
is difficult to estimate
foregone schools impact taxes until participation rates materialize. See further elaboration
in number 3.
With respect to expenditures, the primary impact will be to the Department of Permitting
Services for a contractor to set up the program, website, certifications, marketing and
administration. InDPS's FY14 approved budget $80,000 has been included for a
contractor and $18,694 has been included for 20% of a grade 26 position to be absorbed
in a current full-time position in additional estimated staffmg costs.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
Estimating foregone school impact taxes is difficult until participation rates materialize.
Assuming credits of$500 per certified residence with 5% participation, $1,000 per
certified residence with 10% participation, and $1,500 per certified residence with 25%
participation estimated lost revenues could be as high as the following for each respective
tier:
Fiscal Year
Lost Revenues: Visit-
ability
5%
10%
25%
2013
2014
2015
2016
2017
2018
Total
$0
$0
$0
$15,794)
$63,178)
($236,917)
$16,347)
($65,386)
($245,198)
($16,834)
($67,336)
($252,510)
$17,347)
($69,390)
{$260,212)
($17,888)
($84,211)
$336,843)
($268,324)
I
($1,263,161)
Assuming the County's property tax revenues remain at the Charter Limit, there would be
no loss of property tax revenues to the County.
Given annual implementation costs of $98,694, the six year total is $592,164.
4. An actuarial analysis through the entire amortization period for each bill that would affect
retiree pension or group insurance costs.
This legislation does not affect retiree pension or group insurance costs.
5. Later actions that may affect future revenue and expenditures if the bill authorizes future
spending.
See number 3 above.
6. An estimate ofthe stafftime needed to implement the bilL
For DPS, a full-time contractor will be dedicated to the implementation of the bill in
addition to 20% of a grade 26 workyear for a total estimated annual cost of$98,694. The
funds are included in the department's approved FY14 budget.
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With respect to staff time for the Department of Finance, it takes roughly 45 minutes to 1
hour per account of administration time for similar tax credits. Once implemented, it
would take approximately 400 hours annually of staff time for this program, assuming
400 credits per year. This does not include the implementation time of setting up the
system.
It
is possible the Department of Technology Services will be involved in
programming the system/tax credit and importing the file into the Municipal Uniform
Information System for collectionlbilling.
7. An explanation of how the addition of new staff responsibilities would affect other duties.
New increased Finance staff duties would include application processing for the tax
credit. Finance staff would have to reprioritize other duties as assigned.
8. An estimate of costs when an additional appropriation is needed.
No additional appropriation would be needed as the costs of implementing this bill are
included in the FY14 approved budget.
9. A description of any variable that could affect revenue and cost estimates.
Key variables include the number of tax credit applications for processing, the total
amount of capped property tax credits, the total amount of uncapped schools impact tax
credits, and whether property tax revenue would remain at the Charter Limit.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
This legislation places a $600,000 cap on property tax credits issued each year. In the
event that credits applied for exceed this amount, they are to be credited for the next
fiscal year.
It
would be possible for a backlog of credits to occur in future fiscal years;
however, under the proposed legislation, total credits would not exceed $600,000 each
fiscal year.
It
is possible for property tax credit payments to property ovvners to occur
over multiple fiscal years. Schools impact tax credits are not capped. See number 3
above for a range of potential revenue impacts due to the school impact tax credit
provisions in the bill.
11. If a bill is likely to have no fiscal impact, why that is the case.
Not applicable.
12. Other fiscal impacts or comments.
None.
13. The following contributed to and concurred with this analysis:
Dennis Hetman, Office of Management and Budget
J7
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Diane Schwartz Jones, Department of Pennitting Services
Joseph Beach, Finance Department
David Platt, Finance Department
a
e
. Hughes, Dir
nce of Management and Budget
Date
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Economic Impact Statement
Bill 5-13, Property Tax Credit - Accessibility Features
Background:
This legislation would grant a property tax credit to the owner for accessibility features
installed in a dwelling unit. As amended, it would also grant a non-duplicative property
tax credit to the owner of a single-family detached unit or a single-family attached unit.
As amended, the bill would grant a credit against the Development Impact Tax for
School Improvements for certain accessibility features in connection with a newly
constructed residential unit.
1.
The sources of information, assumptions, and methodologies used.
• For the "Accessibility Features" property
tax
credit (Section 15-18(T), assume
that all $100,000 in available tax credits are taken each year.
• For the "Level I and Level II Accessibility Standards property tax credit, assume
that the majority of the Design for Life features would be eligible for either the
$3,000 credit for features meeting Level I Accessibility Standards as provided in
Section
15~18U(a)(4)
of Bill 5-13 (Bill) or the $10,000 credit for features meeting
Level II Accessibility Standards as provided in Section 15-18U(a)(4) of the Bill.
Further,
• Assume that all $500,000 in property tax credits available under Section 15-18(U)
are taken each year.
• The maximum amount of all property tax credits granted under the provisions of
the Bill is $600,000.
• Assume that the developers would be eligible for a credit of $500 against the
Development Impact Tax for School Improvements and that credit only applies to
Level I Accessibility Standards as provided
in
Section lS-18U(c)(1).
• Assume that 10% of the new units built will be eligible for the Level I
Accessibility Standards Schools Impact Tax Credit.
• Data on construction starts for residential properties from McGraw-Hill
Construction. Data include the number of residential units - both single-family
and townhouse units and construction costs.
2. A description of any variable that could affect the economic impact estimates.
• Two variables that could affect the economic impact estimates are the
construction costs for new residential units and the costs of the accessibility
features installed in the residential unit.
Page 1 of3
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Economic Impact Statement
Bill 5-13,
Property Tax Credit - Accessibility Features
• Based on data provided by McGraw-Hill Construction, the average construction
cost (labor and materials) for a single-family unit ranged from nearly $423,000 in
calendar year 2006, the peak of the housing boom, to the current average cost of
nearly $240,000. Such variation in the costs of construction for single-family
units will have an effect on the demand for new single-family units with or
without the accessibility features.
• Given the assumptions in the first bullet in item #1, the estimated number of units
eligible for the Accessibility Features property tax credits is approximately 40,
based on each unit being eligible for the maximum $2,500 credit.
• Given the assumptions under the second and fourth bullets in item #1 and the
number of 1,207 new residential units constructed in calendar year 2012, the
estimated number of units eligible for the Level I and Level II property tax credits
is approximately 80 units or less than 7 percent of newly constructed units. That
estimate is based on 50 percent opting for Level I features ($3,000) and 50
percent opting for Level II features (maximum credit of $10,000).
• Given the assumptions in the sixth bullet in item #1, and the fact that there were
1,207 new residential units constructed in 2012, then at the 5% Level I standard,
about 120 units would be eligible for $500 impact tax credits, which would
amount to $60,000 in Schools Impact Tax Credits. The same number of eligible
units at the 30% Level I standard would received $2,000 per unit in credits, for a
total of $240,000 in Schools Impact Tax Credits. These results are scalable.
3. The Bill's positive or negative effect, if any on employment, spending, saving,
investment, incomes, and property values in the County.
• Based on the percent of newly constructed residential units opting for the
accessibility features as estimated in the third bullet under item #3, the
economic impact would be minimal.
• The bill may provide a modest incentive for developers, but that incentive
would be dependent on the demand for special features and would likely result
in no growth in employment in the construction industry. Rather the
economic benefit would be to those developers who currently specialize in
installing the accessibility features and to those companies that provide
"accessibility" products.
• The legislation may also result in avoided costs for certain homeowners who
are in need of accessibility improvements s6 that they may remain in their
homes rather than relocate to another home or an institutional setting.
• Finally, the value of the accessibility features for the residential unit to the
O\vners is based on the services that they provide and not as an investment in
an asset which is limited to a segment of the real estate market. The
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Economic Impact Statement
Bill 5-13,
Property Tax Credit - AccessibilitY Features
marketability of such a unit would be limited to the demand for a unit
with
those features.
4.
If
a Bill is likely to have no economic impact, why is that the case?
• The Bill would likely have very limited economic impact as discussed in item #3.
5.
The followIng contributed to and concurred with this analysis:
David Platt and
Mike Coveyou, Finance.
Jo~ep~
F.
B~ach,
hector
DePavtment of Finance
Date·
Page 3 of3
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TESTIMONY ON BEHALF OF COUNTY EXECUTIVE ISIAH LEGGETT
IN SUPPORT OF BILL 5-13 TO PROVIDE A PROPERTY TAX CREDIT
FOR CERTAIN ACCESSIBILITY FEATURES
Good afternoon Council President Navarro and members of the County Council. My name is
Diane Schwartz Jones, Director of the Department of Permitting Services. I am pleased to
provide testimony on behalf of County Executive Isiah Leggett in support of the objective of Bill
5-13 to facilitate renovations to housing to include features that will make it more accessible for
someone with physical impairments or frailties. County Executive Leggett urges the County
Council to go even farther to remove mobility and access barriers from homes in Montgomery
County and will provide suggested amendments and additional legislation to do just that.
The County Executive expresses deep appreciation for the work of Councilmember George
Leventhal for bringing this issue forward. This bill coincides with a year of work by several
Executive Branch agencies. The work was done at the direction of
Mr.
Leggett to review
recommendations of a stakeholder Design for Life Workgroup which included members from the
Commission on People with Disabilities, the development community, architects and others.
County Executive Leggett directed staff to deVelop an incentive based Design for Life program
that will lead to a more robust supply of housing with Design for Life features. Our common
goal is to provide greater housing stock that can be visited and lived in by populations with
.
mobility and other challenges.
While
Mr.
Leggett fully supports the County Council addressing this issue, he would like to see
it go further than retrofits to existing housing. The County Executive understands that
Mr.
Leventhal, Bill5-13's sponsor, welcomes the engagement and work of the Executive Branch to
provide a more robust program.
As
Mr.
Leggett indicated
in
the memorandum he sent to Council President Navarro on February
21,2013, we need to increase our housing stock with features that make the home more easily
accessed and fully usable by all, including those living with mobility impairments and seniors, .
both of whom experience difficulties in housing with standard designs. \Ve need to take
..
meaningful steps to remove accessibility barriers that interfere with full use of one's home.
We need a program that incentivizes both builders and property owners to include Design for
Life features in existing housing and new construction. To do this requires that we look at
additional incentives, such as impact
tax
credits. Property tax credits will encourage the property
owner. Impact tax credits will incentivize the development community. We also need to $et the
ma'{imum level of available credits high enough to encourage participation. Therefore the
maximum level of available credits should be revisited as needed as we gauge participation in
future years.
The County Executive's proposal includes a program that will encourage participation by
recognizing builders and designers who participate in creation of homes with Design for Life
features. Finally, we need to make certain that end users have timely notice about the availability
of these credits.
TESTIMONY IN SUPPORT OF Bill 5-13
Page lof2
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County Executive Leggett's proposal has the following four-prongs:
First, a property tax credit for property owners
either renovating homes to include Design for
Life features or buying new homes that include Design for Life features. The credit could be as
much as $10,000 which could be claimed in annual amounts of$2000. The total amount of tax
credits available in a given fiscal year would be $500,000, but that amount should be examined
each fiscal year.
Second, a graduated credit against school impact taxes
for homes that are built with Design
for Life features. The greater the percentage of units in a project built with these features the
higher the credit would be for such units up to a maximum credit of
$2000/unit.
While there are
many groups with needs that will be served by housing with DFL features, our growing senior
population, a group that does not typically generate students, will likely be a large consumer of
housing with DFL features. The County Executive's proposal is structured so that developers
can take advantage of the credit in a way that will not compensate them in both the price of the
home and the credit. Likewise, because the definition of visitable includes livable features, an
adjustment ranging from $500 to $2000 would be made to the available property tax credit to the
extent that a school impact tax credit has been provided for the unit.
Third, a certification program
will be developed by the Department of Pemiitting Services that
will i) provide levels of certification for impact tax credits (bronze, silver, gold and platinum), ii)
fast-track permits for Design for Life units, iii) include partnerships to promote the projects,
developers, builders and designers who participate in Design for Life projects, and iv) help raise
awareness about the need for and production of housing with Design for Life features.
Fourth, timely and effective information about Design for Life and notice of the availability .
of the tax credit
at the time of contracting for a home is critical.
It
is this timely notice that will
encourage purchasers to request Design for Life features in new homes knowing that while the
cost may be financed with the mortgage, the homeowner can receive up to $10,000 in tax credits
for the features making it cost effective to include the items in the home purchase. While Design
for Life features are not mandated, if a builder or developer does not include such features, an
informed purchaser can select a different builder or developer. Mr. Leggett will be transmitting
additional legislation to impose a requirement that developers and realtors disclose to prospective
purchasers of new homes the availability of property tax credits for Design for Life features if
included in the home.
This multi-pronged approach will enable the County to increase the stock of housing with DFL
features that remove barriers and allow people to remain in their homes rather than face
expensive costs of institutional assisted living or expensive renovation costs at a later date.
The County Executive will be transmitting
sugge~ted
amendments and further legislation
consistent with the items just described.
Mr.
Leggett looks forward to working with the Council
in a collaborative effort to develop an effective approach to increase the supply of homes in our
County that are accessible and fully usable for all. Thank you for receiving this testimony and
Executive Staff is available to answer Council questions.
TESTIMONY IN SUPPORT OF BILL 5-13
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COMMISSION ON AGING
February 26,2013
Remarks by Charles Kauffman, Commissioner
Montgomery County Commission on Aging
County Council Public Hearing on Bill 5-13
Property Tax Credit-Accessibility Features
Good afternoon, my name is Charles Kauffman;.! am a member ofthe Montgomery County Commission on
Aging and I am speaking on behalf ofthe Commission in support of a property tax credit for accessibility
renovations.
Bill 5-13 would provide for a property tax credit for an accessibility feature installed on an existing residence.
Today, more and older adults want to age in place, in their homes and community, and make Montgomery
County their community for a lifetime. But for residents to age in place, their homes need to be safe and
livable for them and accessibility is a key factor. County residents need financial incentives to be able to
make accessibility improvements on their homes. These improvements are vital to their safety and wellbeing.
They reduce medical emergencies and prolonged medical care and public expenses attendant thereto.
The modifications contemplated included without being limited to:
Accessibility features such as:
(1) A no-step entrance allowing access into a residence;
(2) Interior passage doors providing at least a 32-inch-wide clear opening;
(3) Grab bars around a toilet, tub, or shower installed to support at least 250 pounds;
(4) Light switches, outlets, and thermostats placed in wheelchair-accessible locations;
(5) Lever handles on doors
The tax credit allowed is lesser of50% ofthe eligible costs or $2500, with an annual limit of$ 100,000 as
a total cost to the County.
The Commission on Aging support Bill 5-13 because the improvements contemplated will enhance the
health, safety and welfare ofseniors, will reduce incidences offalls and accidents, and will reduce emergency
medical visits. The tax credit contemplated would provide both an individual incentive and a financial
ben~:Fit
for the County by reduced accidents as well as a physical benefit for its residents.
.
Depa:rtment of Health and Human Services
401 Hungerford Drive, 4th Floor, Rockville, Maryland, 20850 240-777-1120, FAX
240~777-1436
www.montgomerycountymd.gov/hhs
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Without home modifications, the only alternative is often a nursing home or assisted living facility with its
ncreased costs. The Commission on Aging in its summer studies program has highlighted the need forpolicies
that encourage seniors to undertake such renovations. This legislation would do that.
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Commission on People with Disabilities
Testimony on County Council Public Hearing on Bill 5-13
Property Ta.x Credit - Accessibility Features
Remarks by Tim Markwood, Commissioner
February 26,2013
Good Afternoon, my name is Tim Markwood, and
I
am a member of the Commission on People with
Disabilities and
I
am speaking on behalf of the Commission in support of Council member Leventhal's
initiative to increase the supply of housing that meets the Design for Life Montgomery design features
of being visit-able or live-able to help make our County a more inclusive community.
A Visit-able home has three basic design elements:
1. At least one no step entry at any entry door such as front door, back door, side door (any door)
deck or through the garage connected to an accessible route to a place to visit on that level.
2. 32" or 2'
x
lO"norninal clear width interior doors.
3.
A useable powder room or Bathroom
A Live-able home has:
1.
The three basic design features of a Visitable home, plus
2. At least one bedroom, full bath, and kitchen with a circulation path that connects the rooms to
an accessible entrance.
As a Commissioner, I have served on the Design for Life Montgomery Workgroup for the past 3 years
and have been involved in trying to create incentives for both property owners and builders to develop
this type of housing. We recommend to you to provide incentives to both builders in the form of an
impact tax credit and property O\VIlers in the form of a property tax credit to include Design for life
.
features in both existing housing
AND
new construction.
In
addition to being a Commissioner
I
am a Realtor. As a Realtor,
I
have observed the current numbers
of homes in the County with accessible features are at a minimum. With these incentives
I
feel that it is
a good first step to increase the inventory of homes with Design for Life features.
We have had the opportunity to review the Executive's proposal sent to the Council to provide to
property owners up to $3000 of certified costs in Property Tax Credits where there has not been
an
Impact Tax credit for visit-able homes and up to $10,000 for homes made to be live-able. Total tax
credits issued by the County to eligible persons would be capped at $500,000 per year. We support
this.
For builders, the Executive is proposing a school impact tax credit for visit-ability which is currently
on a sliding scale from $500 per unit for 5% of a development up to $2000 per unit for developments
with 30% or more being made visitable. We believe the $500 per unit is not significant enough to get
the interest of a builder. We believe that $2000 per unit is more appropriate and provides an increased
incentive. We believe a set credit amount should be provided for each home built which meets the
Design for LIfe staridards ... not a sliding scale based on the percentage of homes built. This is a better
and more equitable way of encouraging builders to incorporate Design for Life standards.
Thank you for the opportunity to share the Coinmission's thoughts with you on this very important
Issue.
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GREATER CAPITAL AREA ASSOCIATION OF REALTORS®
TESTIMONYOF
THE
GREATER
CAPITAL AREA ASSOCIATION OF REALTORS®
BEFORE THE MONTGO:MERY COUNTY COUNCIL
REGARDING
"BillS-i3,
Property
Tax
Credit -Accessibility Features"
February 26,2013
Council President Navarro and members of the County CoUncil, my name is Bonnie Casper and I
am the 2013 Immediate Past President for the Greater Capital Area Association of
REALTORS®
("GCAAR") the voice of Montgomery County and the District of Columbia's
more than 8500
REAL TORS®,
property managers, title attorneys and other real estate .
professionals.
On
behalf of GCAAR, I would like to voice our support for Bill 5-13.
.
.
GCAAR supports measUres that allow property owners to make necessary improvements to their
existing homes. Bil15-13 is important legislation because it will allow for accessibility features
to be added to a home
whil~
providing a property tax credit to ease the burden of the cost of
these important and necessary improvements.
REALTORS®
strongly support this type of legislation because the inventory of homes with .
accessibility options is currently very limited and dwindling everyday. If this bill is approved it
will expand housing options and choices that homebuyers with mobility .impairments have. It
will also 'allow homeowners who might develop mobility .impainnents the ability to stay in.their '
current home and make improvements necessary to remain. This in turn will increase the
housing stock with accessibility features a:nd provide more housing choices for the disabled
community.
.
GCAAR also understands thatthe County Executive has recommended some changes to the
legislation to amend it to require developers and realtors disclose to prospective purchasers of
new homes the availability of property tax credits for Design for Life features if included in the
home. We would like further clarification of this provision because it relates to new home
contracts not existing home contracts. Since this legislation directly relates to improvements of
existing residences the mc1usion of new homes needs to be thought through.'·
.
GCAAR strongly supports Bill 5-13 and sees it as legislation that allows homebuyers and
. homeowners to remove architectural barriers and remain in their home.
As always, I thank the members of the County Council for your consideration' of GCAi\R.' s
perspective on this issue.
8757 GEORGI!, lNENUE • SUITE 600 • SILVER
PHONE
30~
.590.2000 •
FAX 30'
wW'N.gcaar.cam
-
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JACKIE
SIMON
HOM E
S~
President Navarro, Members of the Council,
I am Jackie Simon, an advocate for people with Disabilities. First I want to thank
Councilman Leventhal for his initiation of this legislation. Frequently, the
emergency need for accessibility features presents itself when family resources
are at their lowest, a time of medical emergency and when family stress levels
are at their highest. This initiative will relieve some of this economic burden.
Sadly, heretofore, our county's housing stock has lacked accessibility features that
would permit persons to age in place or recuperate at home after an accident or
illness.
Our large institutions have been closed, yet our communities have not been made
ready to permit persons with disabilities to move about our neighborhoods freely_
We've done well in many of our public spaces, but our homes do not permit
persons with disabilities to be a part of the community in which they live.
This bUl
Testimony in favor of Bill 5-13
addresses
the
issue of our existing housing stock., and is an excellent start to
opening up our community.
An equally challenging concern is the 15,000 homes yet to be built in the County.
For 8 years there has been a voluntary program, Design for Life, that was
intended to stimulate the construction of new homes that eliminated
architectural barriers. That program produced 25 homes over 8 years. Sadly, this
mirrors the experiences of other communities with voluntary programs.
To be
truly effective legislated mandates are required.
Pima County Arizona has a
mandatory program covering all new construction which has withstood the legal
legal challenges. Bolinbrook, II. has a mandatory program, under which 3700
homes with basements have been built. The experience there is that in those
--------------------------------------------~-------------------------
Homes
for
a lifetime
of
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limited circumstances where there is an added cost to meet these standards, the
cost has been $637 per unit.
As the County Executive has stated, "We can no longer rely on volunteer
programs to create this stock."
Bill 5-13 addresses financial relief and an economic incentive to home owners to
remove architectural barriers as they remodel their homes. AARP estimates that
up to 60% of all homes will at one time, during their its life span, provide shelter
to a person with a severe mobility impairment.
The builder representatives with whom I've worked over the years, have
expressed a fear that the market will reject visitable homes. Experience in other
communities report no such rejection. In fact, they note that lithe no step entry,
32"wide doors and minimum
36"
wide halls are not even noticed unless they are
pointed out",
It is those three items that can cost tens of thousands of dollars to add after the
fact. If even those three items were mandated most persons would be able to
make other adjustments to meet their particular needs.
I urge the passage of Bill 5-13, and the Executive's plans which are to follow, with
the change that the three visitability features be required in all new single
family homes. The Executive's recommended incentives will c1early.offset any
added costs the builders might experience, based on the experiences of other
communities where there is a visitability mandate.
I hope the Countts goal will assure that we become a community that includes
people because
II
a community that excludes even one of its members is no
community at all".