AGENDA ITEM #3
February 26,2013
Public Hearing
MEMORANDUM
February 21,2013
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative
Attorneyc*t~
Public Hearing:
Bill 5-13, Property Tax Credit - Accessibility Features
Bill 5-13, Property Tax Credit - Accessibility Features, sponsored by Councilmember Leventhal,
was introduced on February 5, 2013. A Government Operations and Fiscal Policy Committee
worksession is tentatively scheduled for March 11 at 2 p.m.
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 ©7. Howard County
enacted a similar credit on October 1, 2012. See ©9 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.
This packet contains:
BiU5-13
Legislative Request Report
State law
Executive memorandum
Fiscal and Economic Impact Statement
Circle
#
1
6
7
9
12
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Ta"
Credit Accessibility Features\Public Hearing Memo.Doc
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Bill No. _ _ _
~~
_ _ _ __
Concerning: Property Tax Credit ­
Accessibility Features
Revised:
1/25/2013
Draft No. 1
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
generally amend County law regarding property tax credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section 52-18T
Boldface
Underlining
[Single boldface brackets]
QQuble. 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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BILL No.
5-13
1
Sec. 1. Section 52-18T is added as follows:
52-18T. Property Tax Credit Accessibility Features
2
3
=
ill
Definitions.
In this Section, the following terms have the meanmg
4
indicated.
Department
means the Department of Finance.
Director
means the Director of the Department or the Director's
5
6
7
designee.
Eligible costs
means costs that are:
8
9
10
11
ill
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
12
13
costs to install the feature;
paid
Qy
the applicant and not, or will not be, reimbursed
Qy
any
entity; and
14
15
ill
ill
in excess of$500.
16
17
18
19
20
Feature
means
~
permanent modification to
~
residence that results in:
~
no-step front door entrance with
~
threshold that does not
exceed
QL.
inch in depth with tapered advance and return surfaces
~
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;
21
22
23
ill
ill
an installed ramp creating
~
no-step entrance;
an interior doorway that provides
clearing opening;
~
32-inch wide or wider
24
25
ill
an exterior doorway that provides
~
36-inch wide or wider clear
26
opening, but only if accompanied
Qy
exterior lighting that is
®
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BILL
No. 5-13
27
either controlled from inside the residence, automatically
controlled, or continuously on;
28
29
30
ill
walls around 2 toilet, tub, or shower reinforced to allow for the'
proper installation of grab bars with grab bars installed in
accordance with the Americans with Disabilities Act Standards
for Accessible Design;
31
32
33
34
®
maneuvering space of at least 30 inches
Qy
48 inches in
f!
bathroom or kitchen so that
2
person using
2
mobility aid may
enter the room, open and close the door, and operate each fixture
or appliance;
35
36
37
38
39
40
41
ill
an exterior or interior elevator or lift of stair glide unit;
an accessibility-enhanced bathroom, including
2
walk-in or roll­
in shower or tub; or
tID
(2}
an alarm, appliance, and control structurally integrated into the
unit designed to assist an individual with
f!
sensory disability.
42
43
44
45
®
Credit established.
In accordance with Section 9-250 of the Tax­
Property article of the Mmland Code, the owner of real property may
receive
2
property tax credit against the County property tax for
2
feature that is installed on an existing residence that is the owner's
principal residence when the feature
installed.
46
47
48
49
50
51
52
53
W
Amount gfCredit.
The tax credit allowed under this Section is the lesser
of:
ill
ill
@
50% of the eligible costs; or
$2,500.
Annual Limit on Amount gfCredits Granted.
ill
During any fiscal year, the total of all tax credits granted under
this Section must not exceed $100,000.
o
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BILL
No. 5-13
54
55
56
57
ill
Credits must be granted in the order in which the Department
receives the complete applications under subsection
W
of this
Section.
ill
A complete application that, if granted, would cause the limit
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.
58
59
60
W
Application for the Credit.
61
62
63
ill
To receive the credit, a property owner must submit an
application the Department:
CA)
ill)
in the format the Department requires;
that includes
feature;
~
fQPY
64
65
66
of the building permit to install the
{g
that includes any document that the Department requires;
and
67
68
69
70
71
ill}
on or before the date the Department sets.
~
ill
ill
The Department must only accept one application for
credit
under this Section for each property during
~
single tax year.
Administration.
72
ill
ill
The County Executive may adopt regulations under Method
to administer this Section.
The Department must submit
~
ill
73
74
75
76
77
78
79
written report to the Council
Qy
October
1
of each year for the preceding fiscal year. The report
must include the following:
CA)
ill)
{g
ill}
number of applicants;
number of applications approved;
income range of applicants;
modification made
Qy
the applicant;
80
6
01
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BILL
No. 5-13
81
82
83
.aD
ill
(ill
reason for the modification;
other sources from which the applicant received funds or
applied for assistance for the modification;
efforts to advertise the credit; and
any program recommendations.
84
85
86
87
88
.an
(g}
Publicity.
The Department must publicize the credit in
9:
way designed
to inform those most likely to benefit from the credit.
au
Approved:
Etfoctive Date.
The credit authorized
by
this Section applies to tax
89
90
years beginning after June 30, 2013
91
92
93
Nancy Navarro, President, County Council
Date
94
Approved:
95
Isiah Leggett, County Executive
Date
96
This is a correct copy ofCouncil action.
97
Linda
M.
Lauer, Clerk of the Council
Date
98
@
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LEGISLATIVE REQUEST REPORT
Bi115-13
Property Tax: Credit
-
Accessibility Features
DESCRIPTION:
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIEN CE
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.
nJa
F:\LAW\BILLS\1305 Property Tax Credit Accessibility Features\LEGISLATIVE REQUEST REPORT,Doc
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Page I
LexisNexis®
I of I DOCUMENT
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 instalIed 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 ofa county or ofa
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 of the tax credit under this section;
(j)
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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 I, 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
COl/lily EXe(lIlive
February 21, 2013
TO:
FROM:
SUBJECT:
Nancy Navarro, Council President
~
Isjah Leggett, County Executive
~
~
BillS-l3, Property Tax Credit -Accessibility Features
I am writing to express my strong support for Councilmember 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 home.
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 Councilmember 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.
(j)
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Nancy Navarro, Council President
February 21, 2013
Page 2 of 3
I will be sending proposed amendments to Bill 5-13 and additional legislation 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
$500,00O/year
School Impact Tax
(Builder) - with
certification that costs
of visitable
improvements are not
passed on to the
purchaser
Visitable
Up to $3000 of
certified costs
where there has
not been an
Impact Tax
credit (will
capture tear
down/rebuilds)
5% of units ­
$500lunit
10% of units ­
$IOOOlunit
25% of units ­
$1500/unit
30+% of units ­
$2000/unit
Livable
Up to $10,000
(less amount of
any impact tax
credit provided
for address due
to visitable
features)
$0
Cap/applicant/annum
$2000
NA
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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, MARYIAND
MEMORANPUM
February 20, 2013
TO:
FROM:
Nancy Navarro, President, County Council
Bud~ ~
Joseph F. Beach, Director, Department
OfFinan~
U
Jennifer
A.
Hughes, Director, Office of Management and
Council Bill 5-13, Property Tax Credit- Accessibility Features
Please find attached the fiscal and economic impact statements for the above-referenced
SUBJECT:
legislation.
JAH:a2a
c: Kathleen Boucher, Assistant Chief Administrative Officer
Lisa Austin, Offices of the 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 ofManagement and Budget
Anita Aryeetey, Office of Management and Budget
Ayo Apollon, 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 ofwhether 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 of the
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 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, these credits would not cost the County more than $100,000
each fiscal year. It is possible backlogs of payments 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 of Management 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 of the "features" will be eligible for the $2>500
maximum tax credit, as the cost ofthe majority of the features will likely 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.
• Ifthe
number ofrequests 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 $250/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 Coveyou, Finance.
~
'-1.
6--/\:---­
ose F; Beach, DIrector
Department of Finance
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