AGENDA ITEM 5A
October 28,2014
Action
MEMORANDUM
October 24,2014
TO:
FROM:
SUBJECT:
County Council
4J1
Josh Hamlin, Legislative
Attome~
Action: Bill 22-14, Property Tax Rent Reduction Tax Credit
Government Operations and Fiscal Policy Committee recommendation (3-0): enact the Bill
with amendments.
Bill 22-14, Property Tax - Rent Reduction Tax Credit, sponsored by Council Vice
President Leventhal and Councilmembers Berliner, EIrich, Floreen and Navarro, was introduced on
April 22, 2014. A public hearing was held on July 8 and a Government Operations and Fiscal
Policy Committee worksession was held on October 20.
State law authorizes the County to create a
tax
credit for a property owner providing
reduced rent to any tenant who is at least 65 years old or has been determined to be permanently
and totally disabled under various federal acts or by the County health officer. The County is
also permitted to provide for additional limitations on eligibility for the credit. Bill 22-14 would·
allow owners who charge reduced rent to eligible elderly or disabled tenants that is at least 15%
below market rent to apply for a credit against their County property tax. The amount of the
credit would be 50% of the difference between market rent and the reduced rent. The Bill caps
the total amount of credits granted during any fiscal year at $250,000, unless a larger amount is
approved in the annual operating budget or a Council resolution. Bill 22-14 would also require
the Executive to adopt regulations to administer the credit, including income- and asset-based
eligibility requirements for tenants.
Public Hearing and Correspondence
There were two speakers at the public hearing. Joseph Beach, Director of Finance
testified on behalf of the Executive in support of the Bill (©16).
Mr.
Beach did request that the
eligibility requirements for the credit be modified. W. Shaun Pharr of the Apartment and Office
Building Association of Metropolitan Washington (AOBA) also testified in support of the Bill
(©17-18).
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Issues/Committee Recommendations
1.
Should the Council expand eligibility for the credit?
At the public hearing, Joseph Beach requested that the Council amend the qualifications
of eligible tenants to be less restrictive by including a number of ways that a tenant could be
detennined to be disabled, thus allowing the tenant's landlord to become eligible for the credit
(see ©16). The Bill, as drafted, restricts eligibility to:
~
tenant who meets the income- and asset-based eligibility requirements
established
Qy
regulation under subsection
ill
and:
ill
is at least 65 years old;
ill
has been found pennanently and totally disabled and has qualified for
benefits under:
®
the Social Security Act;
(ill
the Railroad Retirement Act;
©
any federal act for members of the United States armed forces; or
ill)
any federal retirement system; or
ill
has been found pennanently and totally disabled
Qy
the County health
officer.
The language in the Bill is identical to the qualifications set forth in the State enabling law (see
©6-7). While the enabling law gives the County the authority to provide by law for "additional
limitations on eligibility for the credit," it does not allow the County to relax the requirements set
in the State law. If the County were to do so, it would be exceeding the authority granted to it by
the State in the enabling law.
Staff understands that no other county in Maryland has provided for this credit; if Bill 22-14 is
enacted and the credit not used, or if the disability definition otherwise proves to severely limit
the credit's utility, the Council may wish to pursue a change to the State law via the County's
General Assembly delegation.
Committee recommendation: Do not amend the eligibility requirements for elderly or disabled
tenants.
2.
County Attorney suggestions.
There were three suggestions for clarity and consistency recommended in the County Attorney's
memorandum (see ©14-15). First, the County Attorney believes that the provision allowing for
the County Health Officer to make a detennination of pennanent and total disability is
inappropriate for Montgomery County. Also, there are references in two subsections of the Bill
to "person" and "taxpayer," respectively, which the County Attorney suggests should be changed
to "owner," as it is the owner who is eligible for the credit. Staff concurs with these suggestions.
Committee recommendation (3-0): Make the changes recommended by the County Attorney.
1.
Delete the provision allowing for a detennination of pennanent and total disability by the
County Health Officer,
2
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Amend lines
6-18,
asfollows:
Elderly or disabled tenant
means
!!
tenant who meets the income- and asset-based eligibility
reguirements established
!2y
regulation under subsection
ill
and:
ill
ill
ill
2.
is at least 65 years old; or
has been found pennanently and totally disabled and has gualified for benefits
under:
ill
the Social Security Act;
lID.
the Railroad Retirement Act;
(Q
any federal act for members of the United States armed forces; or
ill}
any federal retirement system[[;. or
has been found pennanently and totally disabled
.Qy
the County health officer]].:.
Substitute "owner" for "person" and ''taxpayer.''
Amend lines 38-40 as follows:
ill
A credit granted to
[[!!
person]] an owner under this Section must not exceed the
in the tax year in
amount of County property tax paid
.Qy
the [[person]]
which the credit is granted.
Amend line
56
as follows:
lID.
3.
Sunset Date.
demonstrate that the [[taxpayer]] owner is entitled to the credit.
The Committee recommended (3-0) adding a three-year sunset date to the Bill, so that its
impact can be assessed and any necessary modifications can
be
considered.
An
effective date
section providing that the Bill is effective through the tax year ending June 30,2017 was added.
See lines 62-65 at ©4.
Effective Date
The Bill was drafted to take effect on July 1, 2014. Staff recommends amending the
effective date to July 1, 2015, and the expiration date to June 30, 2018, so that the Bill can be
prospective in application, and still have the three year effective period recommended by the
Committee.
This packet contains:
Bill 22-14
Legislative Request Report
Md. Tax-Property Code, §9-219
Fiscal and Economic Impact Statement
County Attorney Memorandum
Joseph Beach Testimony
AOBA Testimony
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Circle
#
1
5
6
8
14
16
17
3
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Bill No.
22-14
Rent
Concerning: Property Tax -
Reduction Tax Credit
Revised:
10/21/2014
Draft No. 6
April 22. 2014
Introduced:
Expires:
October 22,2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: June 30, 2017
Ch. _ _,
Laws
of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council Vice President Leventhal and Councilmembers Berliner, EIrich, Floreen and Navarro
AN
ACT to:
(1)
(2)
create a property tax credit for a property owner providing reduced rent for certain
elderly or disabled tenants; and
generally amend the law relating to property tax credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section [[52-18T])
~bl!bY:
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Addedto 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. 22-14
1
2
Sec.
1.
Section
[[52-18T]] 52-18W
is added as follows:
[[52-18T]] 52-18W.
Property tax credit
=
reduced rent for elderly.Q!
3
4
5
6
7
8
9
10
11
disabled tenants.
ill}
Definitions.
In this Section:
Director
means the Director of Finance or the Director's designee.
Elderly or disabled tenant
means
~
tenant who meets the income- and
asset-based eligibility requirements established
Qy
regulation under
subsection
ill
and:
ill
ill
is at least 65 years old;
has been found permanently and totally disabled and has
qualified for benefits under:
(A)
12
the Social Security Act;
the Railroad Retirement Act;
any federal act for members of the United States armed
forces; or
13
14
15
16
(ID
©
@
any federal retirement system; or
17
ill
has been found permanently and totally disabled
Qy
the County
health officer.
18
19
Market rent
means an amount, determined
Qy
the Department of
Housing and Community Affairs, equal to:
20
21
ill
ill
the rent charged to other tenants for comparable units in the
same property; or
if there are no other comparable units in the same property, the
rent charged for comparable units in the same market area.
22
23
24
25
Reduced rent
means rent charged to an elderly or disabled tenant that
is at least 15% less than market rent.
26
27
28
Rent reduction
means the difference between the market rent and
reduced rent for the dweliintD
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Bill No. 22-14
29
Tax-Property Article
means the Tax-Property Article of the Maryland
30
31
32
33
34
Code.
®
Credit.
As authorized
Qy
§9-219 of the Tax-Property Article, the
owner of !! rental dwelling who provides reduced rent to an elderly or
disabled tenant may receive!! credit against the County property tax.
!£)
Amount
Q[
Credit.
35
36
37
ill
The credit allowed under this Section is 50% of the total rent
reductions provided
Qy
the owner to elderly or disabled tenants
during the
tax
year.
38
39
ill
A credit granted to !! person under this Section must not exceed
the amount of County property tax paid
Qy
the person in the tax
year in which the credit is granted.
40
41
42
43
44
@
Annual aggregate limit.
ill
Unless!! larger amount is approved in the annual operating
budget or !! Council resolution, during any fiscal year, the total
credits granted under this Section must not exceed $250,000.
45
46
ill
ill
Credits must be granted in the order in which the Department of
Finance receives complete applications under subsection
hl
A complete application that, if granted, would cause the limit
set in paragraph
ill
of this subsection to be exceeded, must be
granted in the next fiscal year or years based on the order in
which the Department of Finance received the application.
47
48
49
50
51
52
Utl
Application.
ill
A property owner must submit an application to the Director on
or before the date that the Director sets.
53
54
55
ill
An
application must:
CA)
be on the form that the Director requires; and
(f)
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Bill No. 22-14
56
57
58
59
60
61
62
63
64
65
an
ill
Regulations.
method
demonstrate that the taxpayer is entitled to the credit.
The County Executive must adopt regulations under
administer this Section, including income- and asset­
ill
to
based tenant eligibility requirements.
[[(g}
Applicability.
The credit authorized
Qy
this Section applies to any tax
year beginning after June 30, 2014.]]
Sec. 2.
Effective Date.
This Act takes effect on July 1. 2014 and is
effective for through the tax year ending on June 30. 2017. This Act and any
regulation adopted under it is not effective for any
tax
year beginning on or after
July
1.
2018.
Approved:
66
67
68
69
Craig
L.
Rice, President, County Council
Date
70
71
72
73
Approved:
Isiah Leggett, County Executive
Date
74
75
76
77
This is a correct copy o/Council action.
Linda M. Lauer, Clerk ofthe Council
Date
(1)
F:\LAW\BILLS\J422 Rent
Reduction
Tax Credit\BiII6.Doc
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LEGISLATIVE REQUEST REPORT
Bill 22-14
Property Tax
-
Rent Reduction Tax Credit
DESCRIPTION:
Bill 22-14 would allow owners who charge reduced rent to eligible
elderly or disabled tenants that is at least 15% below market rent to
apply for a credit against their County property tax. The amount of
the credit would be 50% of the difference between market rent and
the reduced rent.
The County wishes to ensure that affordable housing options are
available to elderly and disabled residents.
To provide property tax relief to owners who charge reduced rent to
eligible elderly or disabled tenants.
Office of Finance
To be requested.
To be requested.
To be requested.
To be researched.
Josh Hamlin, 240-777-7892
Tax credit applies Countywide.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
Not applicable.
F:\LAW\BILLS\1422 Rent Reduction Tax Credit\LEGlSLATIVE REQUEST REPORT.Doc
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Page 1
LexisNexis®
loflDOCUMENT
Annotated Code of Maryland
Copyright 2014 by Matthew Bender and Company, Inc., a member of the LexisNexis Group
All rights reserved.
***
Statutes current through Chapter 1 of the 2014 General Assembly Regular Session
***
***
Annotations current through December 7,2013
***
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.
§
9-219 (2014)
§
9-219. Rental dwellings providing reduced rents for elderly or disabled tenants
(a) Qualifications for credit. -- The Mayor and City Council ofBaltimore City or the governing body of a county or of
a municipal corporation may grant, by law, a property
tax
credit against the county or municipal corporation property
tax
imposed on rental dwellings of owners who provide reduced rents for any tenant who:
(I)
is at least 65 years old;
(2) has been found permanently and totally disabled and has qualified for benefits under:
(i)
the Social Security Act;
(ii) the Railroad Retirement Act;
(iii) any federal act for members of the United States armed forces; or
(iv) any federal retirement system; or
(3) has been found permanently and totally disabled by a county health officer or the Baltimore City
Commissioner of Health.
(b) Eligibility; amount and duration; implementation. -- The county or municipal corporation may provide, by law,
for:
(I) the specific requirements for eligibility for a tax credit authorized under this section;
(2) additional limitations on eligibility for the credit;
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Page 2
Md. TAX-PROPERTY Code Ann. § 9-219
(3)
the amount and duration of the credit; and
(4)
any other provision appropriate to implement the credit.
HISTORY:
1991, ch. 415; 1995, ch. 3, § 1.
NOTES:
LexisNexis 50 State Surveys, Legislation
&
Regulations
Archaeological and Historic Sites
(f)
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ROCKVILLE,
MARYlAi~D
MEMORANDUM
May [2,20[4
TO:
FROM:
Craig Rice, President, County Council
Jennifer A. Hughes, DiT,
Joseph F, Beach, Direct'
lee of Management and Budget
ment of Finance
SUBJECT:
FEIS for Council Bill 22-1 ,Property Tax - Rent Reduction Tax Credit
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:fz
cc: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices of the COlmty Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department of Finance
Michae.l Coveyou, Department of Finance
David Platt, Department of Finance
Robert Hagedoorn, Depaltment of Finance
Jed Millard, otl1ce of Management and Budget
Alex Espinosa, Ofhce of Management and Budget
Felicia Zhang, Office of Management and Budget
Naeem Mia, Office of Management and Budget
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Fiscal Impact Statement
Council BiIl22-14, Property Tax - Rent Reduction Tax Credit
1.
Legislative
Summary.
Bill 22-14 would create a property
tax
credit for any property
O\VIler
providing reduced
rent to any tenant who
is
at Jeast 65 years old or has been detennined to
be
permanently
and totally disabled tmder various federal acts or by the County health officer. The Bill
would allow property owners who charge reduced rent to eligible elderly or disabled
tenants that
is
at least 15 percent below market rate to apply for
a
credit against their
County property tax. The amount ofthe credit would be
50
percent ofthe difference
between market rent and the reduced rent. The
Bill
would also require the County
Executive to adopt regulations to administer the
credit~
including illcome- and asset-based
eligibility requirements for tenants.
.
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.
Pursuant to section (d)(l) of Bill 22-14, "unless
a
larger amount is approved in the annual
operating budget or a Council resolution, during any
fiscal
year, the total credits granted
under this Section must not exceed
$250,000."
The Department ofHousing and Community Affairs (DRCA) believes that there would
be few,
if
any, applicants for this
tax
credit program as theBill provides no incentive for
property owners to provide tenants
with
reduced rent. The amount of a credit a property
owner could be granted is only
50
percent of the difference between market rates and the
reduced rate. However, due to already thinly stretched resources in
the
Department of
Finance,
if
there
are
applicants for
this
program, one additional full-time administrative
position at Grade
18
would be required to administer any new property
tax
credits created
by the County.
This
amounts to
a
cost of approximately
$72,000
annually to the
Department
in
total personnel costs.
Considerable staff time may also be required by the DHCA to conduct research on renter
statistics
and
to certify
eligibility
oftenantS
and
property owners (landlQrds).
At
this
time, it
is
not possible to accurately quantify
the
total number and amount
of tax
credits that would be granted under this program. Data is not readily available
as
to how
many tenants in
the
County would be eligible and are paying reduced rents and how
many property owners would apply for the credit.
3.
Revenue and expenditure estimates covering at least the next
6
fiscal years.
See #2.
4.
An
actuarial analysis through the entire amortization period for each bill
that
would affect
retiree pension or group insurance costs.
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N/A
5. Later actions that may affect future revenue and expenditures
if
the bill authorizes future
spending.
Any
appropriation in the operating budget or by Council resolution to raise or lower the
maximum level of support for this
tax
credit program would affect future expenditures.
Creation of any incentives for property owners to offer reduced rents would also increase
expenditures.
6. An estimate ofthe
staff
time needed to implement the
bilL
DHCA believes that there would be few, if any, applicants for this
tax
credit program as
the Bill provides
110
incentive for property O\\'Ilers to provide tenants
with
reduced rent.
However, due to already thinly stretched resources in the Department of Finance, if there
are applicanlc; for this program, one additional full-time administrative position at Grade
18 would
be
required to administer any new property tax credits created
by
the County.
This amounts to a cost of approximately
$72,000
annually to the Department in total
personnel costs.
Considerable staff time may also be required by DHCA to conduct research on renter
statistics and to certify eligibility .of tenants and property owners (landlords).
7. An explanation of how the addition of new staff responsibilities would affect other duties.
Duties of current staff would not be affected
~ith
the addition of one full-time, Grade 18
administrative position in the Department of Finance.
8. An estimate of costs when an additional appropriation is needed.
See #5.
9. A description of any variable that could affect revenue and cost estimates.
Variables affecting revenue and cost estimates include, but arc not limited
to:
a. The number of eligible elderly or disabled tenants in the County
b.
The
number of property owners providing rent for eligible tenants at least 15
percent below market rates
c. The number of
eligible
property owners who apply for the program
d. Creation of incentives for property
O\\'Ilers
to provide reduced rent to eligible
tenant...;;
10. Ranges of revenue or expenditures that are uncertain or difficult to project
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At this time, it is not possible
to
accurately quantify the total number and amount of
tax
credits that would be granted under this program. Data is not readily available as to how
many tenants in the County would be eligible and are paying reduced rents and how
many property owners would apply for the credit.
Considerable staff time may be required by nnCA to conduct research on renter statistics
and to certify eligibility oftenants and property owners (landlords).
11. If a bill is likely to have no
fISCal
impact, why that is the case.
N/A
12, Other fiscal impacts or comments.
N/A
13. The following contributed to and concurred with this analysis:
Richard Y. Nelson, Director, Department ofHousing and Commuriity Affairs
Michael Coveyou, Department of Finance
Jedediah Millard, Office of Management and Budget
@
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Economic Impact Statement
Bill 22-14, Property Tax - Rent Reduction Tax Credit
Background:
This legislation would "'Teate a property
tax
credit for a property owner providing reduced rent
for certain elderly or disabled tenants. Bi1l22-14 would allow ovvners who charge reduced rent
(at least fifteen percent
(15%)
below market rent) to eligible elderly or disabled tenants to apply
for a credit against their County property tax. The amount of the credit would be fifty percent
(50%) of the difference between
the
market rent and the reduced rent. Bi1122-14 would limit the
total credits granted
to
$250,000 during any fiscal year unless a larger amount
is
approved either
in the annual operating budget or a Council resolution.
1.
The sources of information, assumptions, and methodologies used.
Sources of information and
data
include the Department of Finance, the Department of
Housing and Conununity Affairs (DHCA), and the American Conununity Survey (ACS),
U.S. Bureau of the Census.
The assumption is that there would be fewer than 200 credit requests according to
information provided by DHCA.
According
to
ACS, the number of renter-occupied housing units in Montgomery County with
the age of
the
head of the household
65
years or older was
17,431
in
2012. According to the
survey, nearly 10,000 household's gross rent is thirty-five percent or more oftota! household
income. However,
the
total number of eligible households would be limited because
households who reside in either Moderately Priced Dwelling Units (MPDU) or receive a
subsidy are not eligible for this credit
2. A description of any variable that could affect
tbe
economic impact estimates.
The variables that could affect
the
economic impact estimate are the total amount of the
credit that
is
available, the number of credit requests, the average monthly rent
in
the County,
and, at a minimum,.
the
number of renter-occupied housing wlits
~ith
the age of the head of
the household 65 years or older, and the
number of renter-occupied housing units that are
classified as either MPDUs or receive a subsidy.
3. The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
According to infomlation provided by DHCA, the Bill would likely have very little economic
impact on personal income to the renters and business income of the property oVY'Ders.
Tenants who reside in
an
MPDU or receive a subsidy would be excluded from receiving the
credit. DHCA suggests that because property
o\\>ners
who apply for this program would
have to incur lost rent in the amount of fifty percent ofthe rent reduction, there would not be
an
(..'Conormc incentive,
in
most cases.
to
voluntarily reduce the rent
for
the eligible occupants
in
exchange for the property
tax
credit
Page
1
of2
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Economic Impact Statement
Bill 22-14, Property Tax - Rent Reduction Tax Credit
4.
If
a BiD is
likely
to have no economic impact,
why
is
that the case?
The Bill is likely not
to
have a material economic
impact
for reasons presented in #3 above.
5.
The following contributed to and concurred with
this
analysis: David
Platt,
Rob.
Hagedoom.
and Michael
Coveyou, Finance;
and Richard
Nelson, Department
ofHonsing
and
Community
Affairs.
~;rrecro~----
Department
of Finance
Page 2 of2
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OFFICE OF THE COUNTY ATTORNEY
fsiah Leggett
County Executive
Marc
P. Hansen
Coun~y
Al10rney
MEMORANDUM
TO:
VIA:
FROM:
DATE:
RE:
Joseph Beach, Director
Department of Finance
Marc P. Hansen
County Attorney
~
Scott R. Foncannon
Associate County Attorney
May
6,
2014
Bill 22-14, Property Tax
lC;?f-f~\./L
L.-,_ _
Rent Reduction Tax Credit
Rent Reduction Tax
I
have had an opportunity to review Bill 22-14, Property Tax
Credit recently introduced by the Montgomery County Council.
This Bill creates a property tax credit for property owners who provide rent reduction to
elderly or disabled tenants. This real property tax credit is authorized by Section 9-219 orthe
Tax-Property Article of the Annotated Code of Maryland. This enabling law does authorize a
tax
credit of 50% of the total rent reduction provided by an owner to an elderly or disabled
tenant. Subject to my comments below, the Council is authorized and enabled by State law to
adopt this tax credit and
it
is within the authority of the County Council. I have the following
comments concerning this Bill.
The Bill specifically provides that a determination that an individual is permanently or
totally disabled can be made by the County Health Officer. To my knowledge the County Health
Officer, Dr. Tillman, does not have the authority to find someone permanently and totally
disabled nor is there a process in place for this kind of determination or finding. Currently the
Health Officer does not make this type of assessment of disability level and
it
is not clear what
the parameters or procedures are for this type of fmding. I recommend that this sentence be
removed from the Bill. The State law Enabling Act does have this language in the statute,
however, it may apply to other counties where there health officer can make this type of
determination. however. I
think
it is inappropriate for Montgomery County.
101 Monroe Street, Rockville. Maryland 20850..2580
(240)
777-6795
"lTD
(240) 777·2545.
PAX (240)
777-670j •
~cotUbncannon@monlgomerycountymd.g(lv
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Joseph Beach
May 6, 2014
Page 2
The Bill refers to market rent and specifically to a market area. The tenn market area is
not defined and it is not clear what the market area would include.
My fmal comment concerns the use of the word "taxpayer" rather than "owner"
in
Sections 52-18(t) subparagraph (c)(2) and in subparagraph (e)(2)(b). I believe the proper word
to use is "oVvner", because State law states that the credit is pennitted for rent reductions
provided by the "owner" of the property. The taxpayer may not necessarily be the owner
if
for
example the lease provides that the tenant pay the taxes.
I have no further comments concerning this Bill.
cc:
Bonnie A. Kirkland, Assistant Chief Administrative Officer
Offices of the County Executive
SRF:jq
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TESTIMONY ON BEHALF OF COUNTY EXECUTIVE ISIAH LEGGETT ON
COUNCIL BILL 22-14, PROPERTY TAX - RENT REDUCTION TAx CREDIT
July 8, 2014
Good afternoon, my name is Joseph Beach, Director of the County Department of
Finance and I
am
here on behalf of County Executive Isiah Leggett to testify in support of
Council Bill 22-14, Property Tax - Rent Reduction Tax Credit.
Council Bill 22-14 would allow property owners who charge reduced rent to eligible
elderly or disabled tenants that is at least 15% below market rent to apply for a credit against'
their County property
tax.
,
The existing long waiting lists for subsidized housing for elderly and disabled individuals
indicates that there is a significant need for these type of incentive programs to increase the
availability of affordable housing for these populations.
However, the defInition of "disabled tenant" may unduly restrict the number of disabled
individuals who would qualify for inclusion in this program. Very few veterans or other
individuals with disabilities are considered to be totally disabled. This defInition-which is also
found in state law-will significantly limit the number of people who will be able to benefIt from
this legislation.
We recommend amendments to the legislation to include a tenant who has a permanent
disability and 1) is certifIed by the Maryland Department of Education Division of Rehabilitation
Services, or equivalent out-of-state vocational rehabilitation agency as meeting the standard of
disability; or 2) a Veteran rated by the Department of Veterans Affairs with a compensable
service-connected disability of30 percent or more, or 3) an individual determined eligible for or
receiving benefits from the State of Maryland Temporary Disability Assistance Program.
The County Attorney has also suggested some clarifying and technical amendments to
the Council's legislative attorney.
I urge the Council to support this legislation with the recommended amendments. Thank
you for permitting me the time to address the County Council on this important matter.
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AOBA
APARTMENT and OFFICE
BUILDING ASSOCIATION
APARTMENT AND OFFICE BUILDING
ASSOCIATION OF
METROPOLITAN WASHINGTON
TESTIMONY BEFORE THE
MONTGOMERY COUNTY COUNCIL
ON
BILL 22-14, Property Tax - Rent Reduction Tax Credit
July 8,2014
Submitted By:
W. Shaun Pharr, Esq.
Senior Vice President, Government Affairs
BONIA
_'n'e""(1""";)
1050 17th Street,
NW,
Washington, DC 20036
Phone: 202-296-3390 • Fax: 202-296-3399 • Email: webmaster@aoba-metro.org
URL: http://www.aoba-metro.org
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GOOD MORNING PRESIDENT RICE AND MEMBERS OF 'rHE COUNCIL, I AM SHAUN
PHARR, SENIOR VICE PRESIDENT OF GOVERNMENT AFFAIRS FOR THE APAR'rMENT AND
OFFICE BUILDING ASSOCIATION OF METROPOLITAN WASHINGTON (AOBA), A NON­
PROFIT TRADE ASSOCIATION WHOSE MEMBERS ARE OWNERS AND MANAGERS OF
MORE THAN 110,000 APARTMENTS UNITS AND OVER 23 MILI.ION SQUARE FEET OF
OFFICE SPACE IN SUBURBAN MARYLAND, THE MAJORITY OF WHICH IS IN MONTGOMERY
COUNTY.
ON BEHALF OF OUR MULTIFAMILY HOUSING PROVIDER MEMBERS, I AM PLEASED
TO APPEAR TODAY IN SUPPORT OF BILL 22-14, WHICH WOULD UTILIZE CURRENT
AUTHORITY GRANTED BY STATE LAW TO CREATE A "RENT REDUCTION TAX CREDIT"
FOR THE BENEFIT OF ELDERLY OR DISABLED RENTERS WHO MEET ELIGIBILITY
CRITERIA TO BE ESTABLISHED BY THE COUNTY EXECUTIVE AND WHOSE RENTAL
HOUSING PROVIDER HAS CHARGED THE TENANT A RENT THAT IS REDUCED AT LEAST
15% FROM THE MARKET RATE FOR THE UNIT THEY OCCUpy,
THE SOCIAL AND TAX POLICY CONCEPT UNDERLYING THE BILL IS A FAMILIAR
ONE-IT WOULD TAKE WHAT IS COMMONLY KNOWN AS "CIRCUIT BREAKER"
PROTECTION FROM THE PRESSURE OF RISING REAL PROPERTY TAX ASSESSMENTS FOR
CERTAIN ELIGIBLE HOMEOWNERS AND ADAPT IT TO PROVIDE A SOMEWHAT SIMILAR
BENEFIT TO ELIGIBLE RENTERS, SINCE THEY, TOO, MAY FEEL ANALOGOUS PRESSURE
IN THE RENT THEY PAY, IN ADOPTING SUCH A POLICY, MONTGOMERY COUNTY WOULD
JOIN NUMEROUS OTHER JURISDICTIONS ACROSS THE COUN"rRY, COUNCILMEMBER
LEVENTHAL AND COUNCILMEMBERS BERLINER. FLOREEN AND ELRICH ARE TO BE
COMMENDED FOR PROPOSING TO UTILIZE THE AUTHORITY GRAN'rED BY STATE LAW,
AND AOBA LOOKS FORWARD TO ASSISTING THE GOVERNMENT OPERATIONS
COMMITTEE AND COUNCIL IN DOING SO,
THANK YOU AGAIN FOR CONSIDERING THE VIEWS OF AOBA MEMBERS.
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