Agenda Item 5A
November 25,2014
Action
MEMORANDUM
TO:
County Council
FROM:_\~MiChael
Faden, Senior Legislative Attorney
{jJ
Glenn Orlin, Deputy Council Administrator
SUBJECT:
Action:
Expedited Bill 43-14, Parking Lot Districts Tax Exemption
and
Environment
Committee
Transportation, Infrastructure, Energy,
recommendation: enact
with
one amendment.
Expedited Bill 43-14, Parking Lot Districts - Tax Exemption, sponsored by
Council members Floreen and Berliner, was introduced on September 23,2014, A public hearing
was held on October 14 (see testimony, 09-20; also see Silver Spring Chamber of Commerce
letter on 021 and Bethesda Chamber of Commerce letter on 025), A Transportation,
Infrastructure, Energy, and Environment Committee worksession was held on October 30, at
which the Committee unanimously recommended enactment of the Bill with one amendment,
Summary
Bill 43-14 would allow property owners in each County parking lot district
(PLD) to apply for an exemption, to which they are entitled under current law, from applicable
parking lot district taxes during a one-time window ending December 31, 2014, notwithstanding
the current law's April 1 deadline to apply for the exemption.
Testimony
Proponents of this Bill (see testimony on 011-20) argued that they should have
been informed that they needed to apply for the exemption, although County Code §60-14 plainly
so requires (see ©2, lines 3-9). They' pointed out that the County property
tax
bill (see example,
© 16) does not highlight or separate the parking lot district
tax
or otherwise inform landowners that
they are paying that
tax
and not receiving a credit for the parking they supply, Executive
staff
dispute the latter statement (see question 8 on 024).
County Finance Director Beach, representing the County Executive (see testimony, 09-10),
asserted that reopening this application period would "unnecessarily create fiscal and credit market
problems for the County", He emphasized that "the PLD exemption process. " and the criteria for
exemption (in the law) have been in place for several decades", about 600 exemptions have already
been granted, and the April 1 filing deadline is needed to calculate the PLD's budgets and
tax
rates,
(Also see Executive staff's response to issues raised at the hearing on 022-24.)
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Fiscal impact The Office of Management and Budget's fiscal impact statement (see ©5-6)
estimated that the revenue loss
to
the PLD's, particularly Bethesda, resulting from this reopening of
the exemption application period "could be as high as 50% of the tax revenue estimated to be
collected in each PLD" in FYI5. Beyond this bare assumption, which apparently is not based on
specific data (except as discussed below), Executive branch staff could not offer any more precise
revenue loss estimate. Council staff sees this 50% guesstimate as a likely upper bound, with the
actual revenue loss probably somewhat lower. The fiscal impact statement noted on ©6 that the
County does not have a current database of parking actually provided by private landowners in each
PLD. The impact statement noted that in Bethesda only 20% of the tax accounts currently show
that they are fully or partly exempt from the PLD tax, so the County's exposure there may
be
relatively high. By contrast, business sources in Silver Spring checked property tax data and
concluded that most of the major eligible properties there have already received the exemption they
are entitled to.
Assuming the estimated maximum foregone revenue (50% of projected tax revenue), the
revenue loss for each PLD and the County-wide total for the next 6 fiscal years could be up to:
PLD
Bethesda
Mont. Hills
Silver
Spring
Wheaton
Total
$
FY15
$1,314,892
41,381
$3,904,198
$ 240,398
$5,500,869
FY16
$ 1,344,118
$ 42,273
$ 4,014,043
$ 247,092
$ 5,647,526
FY17
$1,391,847
$ 43,761
$4,181,743
$ 257,417
$5,874,768
FY18
$1,452,269
$ 45,605
$4,389,608
$ 270,302
$6,157,784
FY19
$ 1,515,567
$ 47,569
$ 4,606,592
$ 283,662
$ 6,453,390
FY20
$ 1,584,101
49,651
$
$ 4,840,867
$ 298,094
$ 6,772,713
Issues/Committee Recommendations
1) Who was at fault? Does it matter? At the hearing, several property owners
vehemently insisted that the fault for not notifYing them of the need to apply for this exemption lay
with the County. County Finance Director Beach equally vehemently responded that the applicable
law (see ©2, lines 3-9) is clear that applying for the exemption is the property owner's duty.
In Council staff's view, the Council need not answer the "fault" question. The bottom line
is that, for whatever reasons,
the process did not work
and
certain large taxpayers have been paying
large amounts that they should not have.
By the same token, as a result other PLD taxpayers have
benefitted over the years by paying less to the PLD's
than
they should have. Straightening this
situation out will take time and potentially further legislation.! This Bill is intended to be a stopgap
remedy to bring a measure of short-term fairness and justice to the current tax year. Committee
recommendation: enact the Bill.
2) Application period? If this Bill is enacted, should the I-time window to apply for the
exemption last longer than the Bill would allow? If this Bill
is
not enacted until November 25, as
See, e.g., the legislative proposals discussed in the Silver Spring Chamber of Commerce letter on ©21.
Councilmember Berliner has directed staff
to
draft a bill revising the PLD exemption process.
I
2
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now scheduled, would·be applicants will have about a month, during a holiday
perio~
to research
their eligibility and file an application. The Committee
agreed
that this timetable seemed
unreasonably short, and a 3-month window would
be
fairer.
Committee recommendation:
on ©2,
line II, replace December 112014 with February 28.2015.
3) How should any PLD funding shortfall be made up?
Parking lot districts are
enterprise funds, and as such must be self-supporting. Any shortfall of revenue in a PLD must
ultimately be paid by that PLD. The reason that each PLD has a reserve is to cover such a
circumstance. For example, the Silver Spring PLD currently projects an available end-of-FYl5
fimd balance of about $13.4 million, and so can absorb a hit of up
to
$3.9 million. The projected
available end-of-year reserves for the Wheaton and Montgomery Hills PLD's are about $800,000
and $80,000, respectively, so they should
be
able to absorb the FY15 shortfall as well.
The Bethesda PLD may be another matter. Its projected available end-of-year reserve is
only about $1.2 million, so conceivably there may not be enough in that reserve to cover this
shortfall in FYI5.
In
this case, the General Fund could "loan" the Bethesda PLD funds for the
balance of FYI5, on the condition that the Bethesda PLD reimburse that amount to the General
Fund in later fiscal years. Alternatively, the Council by resolution could transfer funds to Bethesda
from another PLD under County Code §60-16(t), inserted by Bill 26-14 last spring. That law
already allowed the Silver Spring PLD to transfer $1.5 million
to
the Bethesda PLD in FY15 on the
condition that the Silver Spring PLD be paid back in FY16.
The more fundamental issue is how each PLD will remain solvent, starting in FY 16 and
beyond, when not only revenue shortfalls from FY15 will have to be made up but similar shortfalls
may apply in successive years. One possibility is to raise significantly the current PLD tax rates,
starting in FY16. Another is to create an entirely different taxing regime for the PLD's; Council
staff understands that the Executive Branch is considering such an approach. This fundamental
issue need not, in our view, be decided in the context ofthis Bill.
Committee recommendation:
see how much revenue is actually lost, and bring the
resulting data and any proposed adjustments back to the Council in the context of the next annual
operating budget.
4) Interest
At the Committee worksession, Finance Director Beach raised the issue of how
much interest the County should pay on any parking lot district taxes refimded under this Bill. The
standard
statutory
interest rate on tax refunds is 12% a year, according to Mr. Beach, which of
course is far above current market interest rates. Director Beach proposed that any such refunds
be
made without paying interest. This could be done by inserting without interest on ©2, line 15, after
2014. Alternatively, ifthe Council decides that a market interest rate should apply, this can be done
by inserting at a market interest rate calculated by the Director at the same place.
Committee
recommendation:
defer this issue to Council action.
3
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This packet contains:
Expedited Bill 43-14 with Committee amendment
Legislative Request Report
Fiscal and economic impact statements
Hearing testimony
County Executive (Finance Department)
Robert Dalrymple
County property tax bill (example)
County property tax rate schedule
Anne Mead
Charles Nulsen, Washington Property
Silver Spring Chamber of Commerce letter
Executive branch post-hearing memo
Bethesda Chamber of Commerce letter
F:\LAW\BILLS\1443 Parking Lot Districts - Tax Exemptions\Action Memo.Doc
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Expedited Bill No.
"""43,,,-~..:...14-,-
_ _ __
Concerning: Parking Lot Districts - Tax
Exemption
Revised: 11-19-14
Draft No._3_
Introduced:
September 23,2014
Expires:
March 23, 2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _--:_ _
~
_ _ _ __
Sunset Date: .....;J=u=IV:-:,1,,:,-'=20"-'1:.:::5_ _ __
Ch. _ _,
Laws
of Mont Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Floreen and Berliner
AN EXPEDITED ACT
to:
(1)
allow certain property owners to apply for an exemption from certain parking lot
district taxes during a certain time period, notwithstanding certain requirements of
law; and
(2)
generally amend the law governing parking lot districts.
By amending
Montgomery County Code
Chapter 60, Silver Spring, Bethesda, Wheaton and Montgomery Hills Parking Lot
Districts
Section 60-14, Application for exemption; determination
Boldface
Underlining
[Single boldface brackets]
QQuble underlining
[[Double boldface bracketsD
* * *
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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Expedited Bill No. 43-14
1
Sec.
1.
Section 60-14 is amended as follows:
60-14.
Application for exemption; determination.
2
3
4
(a)
Any property owner or lessee in any district may apply, in the
following manner, for an exemption from the special taxes prescribed
in this Chapter. On or before April 1 of the application
year~
5
6
7
the
owner or lessee must file with the Department of Transportation an
application in the form and containing information the Department
requires to determine whether the Department should grant an
exemption.
Notwithstanding the preceding sentence, an owner or
8
9
10
11
lessee may file an application for an exemption under this Section no
later than [[December 31, 2014]] February 28. 2015, for the tax year
beginning on July
12
L
2014, and, if the Department finds that the
13
14
15
16
property is eligible for an exemption, the Department must direct the
Department of Finance to refund any parking lot district tax paid for
that property in tax year 2014. If the Department grants an exemption
for a particular property, the exemption continues for each successive
year unless there is a change in the number of parking spaces or in the
floor area, number of employees, or any other factor governing the
number of automobile parking spaces required to qualify for
continued exemption. The property owner or lessee promptly must
notify the Department of any change in qualifying factors.
The
17
18
19
20
21
22
23
Department may, no more than once in any 12 month period, require
any lessee or owner of exempt property to file an information return to
determine whether the property meets the requirements for exemption.
The exemption ends if the lessee or owner does not file the
information return.
24
25
26
27
* *
*
Parking Lot Districts - Tax Exemptions\I443 BiII2.Doc
F:\~[LLS\I443
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Expedited Bill No. 43-14
28
29
30
Sec. 2.
Expedited Effective Date; Expiration.
The Council declares
that this legislation is necessary for the immediate protection of the public interest.
This Act takes effect when it becomes law and expires on July 1,2015.
Approved:
31
32
33
34
Craig
L.
President, County Council
Date
35
36
37
Approved:
38
Isiah Leggett, County Executive
Date
39
40
This is a correct copy o/Council action.
41
42
Linda M. Lauer, Clerk ofthe Council
Date
F:~ILLS\1443
Parking
Lot
Districts· Tax Exemptions\1443 BiIl2.Doc
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LEGISLATIVE REQUEST REPORT
Expedited Bill 43-14
Parking Lot Districts
-
Tax Exemption
DESCRIPTION:
Allows property owners in County parking lot districts to apply for
an exemption from applicable parking lot district taxes during a one­
time window ending December 31, 2014, notwithstanding the current
law's April 1 deadline to file applications.
Some property owners in County parking lot districts may have been
unaware of the need for County Department of Transportation
approval of applicable property tax exemptions, and the deadline to
apply for those exemptions.
To open a one-time window for affected property owners in County
parking lot districts to apply for applicable property tax exemptions.
Department of Transportation, Finance Department
To
be
requested.
To be requested.
To
be
requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905; Glenn
Orlin, Deputy Council Administrator, 240-777-7936
Applies only to County parking lot districts.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
Not applicable.
f:\Jaw\bills\1443 parking lot districts -
tax
exemptions\Jrr.doc
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Fiscal Impact Statement
Expedited Bill No. 43-14
Parking Lot Districts - Tax Exemption
1. Legislative Summary:
Executive Regulation Summary: Sec 60-14 ofthe County code provides the opportunity
for property owners in County Parking Lot Districts (PLDs) to apply for an exemption
from the parking lot district
ad
valorem parking
tax
on or before April 1 of the
application tax year. This bill amends that deadline
to
December 31, 2014, for the FY14
tax
year. Proceeds from the FY14
tax
year are received in FY15 and thus approval ofthis
bill would reduce the estimated
tax
revenue in each PLD in the FY15 approved budget.
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:
The largest fiscal impact ofthe passage ofthis bill is estimated to be a loss of
tax
revenue
in
FY15 due
to
an anticipated increase in the filing of exemptions. We estimate this loss
could
be
as
high
as 50% of the tax revenue estimated
to
be collected in each PLD
in
the
approved FY15 budget. We also expect additional staff will be necessary
to
process the
new
filings.
This could present a fiscal challenge to each PLD, particularly in Bethesda. The
anticipated revenue reduction in Bethesda would be $1.315M and the planned available
reserves in the approved FY15 budget are only $1.243. The Bethesda PLD
has
outstanding revenue bonds and tax revenue is
a
significant asset pledged against the bond
obligation. Bond Counsel
has
raised a number of concerns based on the passage ofthis
bill and the anticipated revenue reduction.
In order
to
offset the lost revenue
in
Bethesda, ensure there is no technical breach ofthe
bond covenants and reduce the chances of a downgrade ofthe bond rating as a result of
the passage ofthis bill, fees or fines would have
to
be increased in FY15. We
recommend the Bethesda rate resolution be amended
to
charge in all parking lots and
garages on Saturdays, until 10:00 PM, effective January 1,2015. The change in the
hours requiring payment for parking would generate an additional $814,100 in FY15 and
$1,628,200
in
FY16 and beyond.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years (OOO's):
FY15
Ad Valorem Tax:
Rate Increase:
Expenditures:
-1,315
814
-48
FY16
-1,344
1,628
-96
FY17
FY18
FY19
-1,516
1,628
-107
FY20
-1,584
1,628
-110
-1,392 -1,452
1,628
-100
1,628
-103
4.
An
actuarial analysis through the entire amortization period for each regulation that
would affect retiree pension or group insurance costs:
Nt
A
5
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5. Later actions
that
may affect future revenue and expenditures
if
the regulation authorizes
future spending: The code change does not authorize any additional spending.
6.
An estimate ofthe staff time needed
to
implement the regulation:
Based on the increased number ofexemption requests that we anticipate the passage of
this bill will generate Parking will have to add, at a minimum, a Planning Specialist
ill,
Grade
23, to
process the applications. Based on a hire date of January
1,2015,
at
midpoint ofthe grade, this position
will
cost an additional
$48,250
in
FY15.
7.
An explanation of how the addition ofnew staff responsibilities would affect other
duties:
N/A
8.
An estimate of costs when an additional appropriation is needed: See
#6
above.
9.
A description ofany variable that could affect revenue and cost estimates:
DOTlParking maintains a database ofparking spaces for all private property that
has
applied for an exemption from the parking ad valorem
tax.
No agency
has
any database
of either the specific
actual
land use or parking provided by private property within the
County. This information is collected by M-NCPPC at site plan approval but is simply
fUed on paper and never assembled. Even
if
this information were assembled into a
usable database, many private properties within the PLDs have not been through the site
plan approval process for many years and may have changed their specific land use and
added or reduced available parking since that approval. As a result, it is very difficult to
predict the loss of
tax
revenue with a high degree of certainty. In the Bethesda PLD,
there are
1,712 tax
accounts. Ofthis number, there are currently only
352 (20%)
properties
that
are fully or partially exempt from the
tax.
Thus, the possible exposure is
very large.
10.
Ranges of revenue or expenditures that are uncertain or difficult
to
project: See
#2
and
#9
above.
11.
If
a regulation
is
likely to have no fiscal impact, why that is the case:
NI
A
12.
Other fiscal impacts or comments.
13.
The following contributed
to
and concurred with this analysis (enter name and dept.)
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Economic Impact Statement
Council Bill 43-14
Parking Lot Districts - Tax Exemption
Background:
This proposed legislation amends Section 1 of County Code Section 60-14
to
allow
certain owners to file an application for an exemption no later than December
31,
2014
for the tax year beginning in July
1,
2014. The property owner would receive an
extension
if
that owner qualifies for the exemption. The Department of Finance
(Finance) must refund the owner, who qualifies for the exemption, any property tax
pertaining to the PLD exemption incurred during tax year 2014. Therefore, this
legislation may reduce the estimated tax revenue from each PLD in the FY2015 approved
budget.
1. The sources of information, assumptions, and methodologies used.
Source of information is the Office of Management and Budget
(OMB)
and the
economic impact statement (BIS) assume that the largest eConomic impact is based on
the largest fiscal impact statement provided by
OMB.
The EIS also assumes other
revenue impacts estimated by OMB in order
to
offset the lost property tax
to
ensure
there is no technical breach ofthe bond covenants.
2. A description of any variable that could affect the economic impact estimates.
The variable that could affect the economic impact estimate is the number ofPLDs
eligible for the exemption, the current tax rate, the current exemption amount of
taxable assessment, and the amount of an increase in fees or fines to ensure no
technical breach ofthe bond covenants. Based on data provided by
OMB
and
assuming the
largestfiscal impact,
the total amount of lost property
tax
revenues
between FY2015 and FY2020 is nearly $9.0 million. To ensure that there is no
technical breach ofthe bond covenants, OMB estimates that the fees and fines
cOllected from PLDs would have
to
increase by nearly $9.0 million over that same
period.
3. The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
The legislation would have a positive impact on the incomes of property owners
through reduced property taxes. However, overall the economic impact could have a
very modest negative impact on incomes because of the increase in fees and fines
paid by customers
to
ensure that there is no technical breach ofbond covenants.
There is an economic impact on property values to those property owners who
receive an exemption. There is also no impact on employment, investment, spending,
and savings in the County.
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Economic Impact Statement
Council Bill 43-14
Parking Lot Districts - Tax Exemption
4. If a Bill
is
likely to have no economic impact, why is that the case?
There is an economic impact to property owners who receive an exemption through
reduced property
tax
revenues. However, this positive impact is offset with an
increase in fees and fines for customers.
5. The following contributed to and concurred with this analysis: David Platt and Rob
Hagedoom, Finance; Brady Goldsmith, OMB.
~1-~
(
F. Beach, Director
",D~partment
of Finance
Jo~eph
I
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3
Testimony on Behalf of County Executive Isiah Leggett on
Expedited
Bill 43-14
Parking Lot Districts - Tax Exemption
October 14,2014
Good Afternoon my name is Joseph Beach, I am the Director of the Department
of Finance and I am here this afternoon on behalf of County Executive Isiah Leggett to
testify in opposition to Expedited Bil143-14 Parking Lot Districts - Tax Exemption.
Permitting the retroactive exemptions authorized in the proposed legislation
unnecessarily creates fiscal and credit market problems for the County. The Bethesda
parking district has over $47 million in outstanding revenue debt. The primary pledge for
security of this debt is the ad valorem tax. The County made a number of covenants for
the benefit of bondholders in Order No. B160-92 related to the issuance of parking
revenue bonds, including covenants to prescribe parking meter and other fees and to levy
special taxes at a rate and in an amount in each fiscal year to maintain Net Revenues (as
defined in the Order) of not less
than
1.25 times the maximum principal and interest due
on the bonds in such fiscal year.
Taking an action that calls in to question the County's compliance with this
covenant and that impedes this security for bond holders weakens market confidence in
the existing debt and weakens the County's overall credit profile in the municipal market.
I should also note in this context that the County
has
scheduled the sale of its GO Bonds
for November 6 ofthis year. Any action that weakens the security of existing debt is not
consistent with the financial management characteristics of a AAA jurisdiction.
It creates a fiscal problem because a mid-year unanticipated reduction of ad
valorem tax revenues undermines the Parking District Budgets approved by the Council
this past May.
In
the Bethesda District this problem is especially serious since the
County authorized a transfer of $1.5 million from the Silver Spring Parking District to the
Bethesda'Parking District in FY15 to avert the Bethesda Parking District from ending the
year with a deficit in its general reserve. Depending on the number of retroactive
exemptions granted under the proposed extended deadline it may be necessary to offset
this reduction
in
revenues
with
reductions
in
planned expenditures or transfers. This
reduction
in
revenue comes at a time when we have reduced flexibility and increased
economic uncertainty and will redirect resources from other priorities.
We also believe that the extended deadline for claiming this exemption is
unnecessary since the PLD exemption process established under Section 60-14 of the
County Code and the criteria for exemption established in Chapter 59 have been in place
for several decades.
In
fact there are approximately 600 exemptions already granted in
the parking districts. The application form is available in County offices and on the
County's website. Further the tax bills that include the PLD rate combined with the
County's other property
tax
rates is essentially unchanged for many years.
The April 1st deadline for requests for the exemption is not an arbitrarily imposed
date, but as with most exemption and credit programs, exists in law so that there is
adequate time
to
review and verify the request and incorporate the impact of the
exemptions awarded in the estimate of assessable base for the district so that the County
Council can set fee, fine, and tax rates at a level sufficient
to
pay for the operations of the '
1
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district as well as any capital needs, and to comply with the bond covenants. An
extension of the deadline to December, several months after passage of the budget and
tax
rates undermines this carefully thought out timeline.
The PLD
tax
exemption, as with any other
tax
exemption or credit, is not
automatically awarded to the
tax
payer. The burden of affirmatively claiming and
proVing eligibility for the exemption is with the
tax
payer and not the
tax
collectod
Putting the burden on the
tax
collector is inefficient and costly and is not consistent with
the general statutory scheme for
tax
exemptions or credits.
.
I urge the Council to not support this legislation.
Pittman v. Housing Auth.,
180 Md. 457, 460, 25 A.2d 466 (1942). See also
Maryland­
National Capital Park and Planning Commission v. State Dept.,
110 Md. App. 677, 689,
678 A.2d 602, 607 (1996) for rules of interpretation of
tax
statutes that create an
exemption.
i
2
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LINOWESI
AND
BLOCHER
LLP
ATTORNEYS AT LAW
October 14,2014
c.
Robert Dalrymple
bdalrymple@linowes-law.com
301.961.5208
AnneM. Mead
amead@linowes-law.com
301.961.5127
The Honorable Craig Rice, President
and Members of the Montgomery County Council
Council Office Building
100 Maryland A venue, Sixth Floor
Rockville, Maryland 20850
Re:
Expedited Bill 43-14 - Parking Lot Districts - Tax Exemption
Hand Delivered
Dear Council President Rice and Members of the County Council:
On behalf of several clients
I
(the "Named Clients") and their related entities doing business in
Montgomery County, we urge the County Council (the "Council") to approve Expedited Bill 43­
14 -Parking Lot Districts ("PLDs") - Tax Exemptions (the "PLD Bill"). As described in the
October
14th
Public Hearing Council Memorandum from Michael Faden, Senior Legislative
Attorney, the PLD Bill will provide a limited one-time window (ending December 31, 2014) for
PLD Property Owners to apply for an exemption from PLD taxes embedded in the property tax
reflected in ad valorem tax bills issued on July 1,2014. As explained in detail below, while the
PLD Bill does not repair the flawed PLD tax exemption process as it exists today (and as it has
existed in the past to the detriment of many), it will address the inequitable and unlawful levy
and collection ofPLD taxes for some PLD Property Owners for this current tax year.
The problem sought to be partially addressed with this PLD Bill stems from a recent chance
discovery that the Named Clients were not receiving exemptions from the PLD taxes that they
were each legally entitled. [The circuitous research that was required to make this fortuitous
discovery is described in Attachment "A" hereto.] We quickly learned that not only were the
Named Clients unaware that they were not receiving the lawfully entitled exemptions (which is
Including StonebridgeCarras, Washington Property Company, Home Properties, and Southern
Management Corporation; however, there are numerous other property owners in the County's
four (4) Parking Lot Districts (Bethesda, Silver Spring, Wheaton, and Montgomery Hills),
ranging from large development companies to individual dwellers, that are not necessarily our
clients but whom are impacted as described herein (collectively, the "PLD Property Owners").
I
7200 Wisconsin Avenue I Suite 800 I Bethesda, MD 20814-4842 I 301.654.0504 I 301.654.2801 Fax I www.linowes-Iaw.com
I
J
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LlNOWES/
AND
BLOCHER
LLP
ATTORNEYS AT LAW
The Honorable Craig Rice
October 14, 2014
Page 2
especially alarming since they all routinely have in place a detailed review of all property tax
invoices by in-house and outside tax advisors), but also that the manner in which the PLD tax is
levied and collected, and the lack of any clear direction to property owners advising ofthe
possibility that exemption from the PLD
tax
might be legally entitled, combine to make the PLD
taxation system and process an unmitigated disaster.
To begin to understand the County's imposition and application of the PLD tax, some
background is necessary. Currently, Section 60-6(a) of the Montgomery County Code (the
"Code") provides that if a property owner in a PLD provides off-street parking facilities for a
property and improvements thereon that comply with all of the requirements of Chapter 59-E
("Off-Street Parking and Loading") ofthe Code, the property "shall be exempt" from the PLD
tax [emphasis added]. However, Section 60-14( a) of the Code then states that a property owner
"may apply" for an exemption from PLD taxes through the submission of an application filed by
April 1
st
of an application year [emphasis added]. The result of these two statutory provisions is
that the County has inequitably and unlawfully created a burden on a property owner to apply for
a tax exemption that exists as a matter oflaw upon meeting the terms of the exemption
(i.e.,
provision of code-required parking). Furthermore, the manner in which the PLD tax is levied
(embedded in the property
tax
with no explanation or distinction) is such that a property owner
has no reasonable opportunity to be aware that the PLD
tax
is being levied or that it might be
legally exempt. To add to the gross injustice of this, the Code requires that application for the
exemption be by April 1 notwithstanding that notice of the property tax (including, but without
mention of the embedded PLD tax) isn't issued until some 3 months after the application
deadline.
The reason that the Named Clients and their respective tax experts were unable to detect that
they were unlawfully and inequitably paying PLD taxes for which they were entitled to an
exemption is that the PLD tax is embedded in the ad valorem property tax that appears in a lump
sum on the annual
tax
bill, with no distinction or notice to property owners of its existence within
the County Property Tax Rate or any reasonable means of detecting the possibility of an
exemption to the tax or that a process is required even ifthere was knowledge of the possible
existence of an exemption.
2
The Named Clients are all very sophisticated property owners
developing complex projects in the PLDs of this County, including public/private projects that
involve the PLDs, with the entitlement ofPLD tax exemption being a critical strategic
component in the design, entitlement, and construction of a project and in factoring the economic
feasibility of a project. Notwithstanding the sophistication of the Named Clients and their
tax
advisors, and their routine annual review of the ad valorem property tax bills to ensure that
Again, Section 60-6(a) of the Code states that the PLD tax exemption "shall" be applied if the
criteria for the exemption is satisfied. As such, requiring an application to receive this statutorily
mandated exemption should not be required.
2
It,
-
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LlNOWESI
AND
BLOCHER
llP
ATTORNEYS AT LAW
The Honorable Craig Rice
October 14,2014
Page 3
proper taxation is occurring, these Named Clients have been unable to determine that they are
not receiving the exemption from the PLO tax that they are absolutely entitled to pursuant to the
Code. This result in and of itself screams that a significant problem with the PLD taxation
system exists, compounded exponentially when applied to PLO Property Owners who are not
savvy and sophisticated real estate professionals. The Named Clients reasonably thought that the
exemption from the PLO tax was applied by virtue of the numerous County and M-NCPPC
reviews of plans for entitlement of their projects, including project (sketch) plans, site plans,
subdivision plans, and the detailed County permit reviews, use and occupancy reviews and
regular inspections which all indicate that parking is provided in compliance with Chapter 59-E
of the Code.
3
As will be explained in our oral testimony and as spelled out in Attachment "A" hereto (with
appropriate illustrative exhibits), there is a very twisted, convoluted and disconnected path that
goes beyond the ad valorem property tax bill issued by the County to be able to determine that
the PLD Property Owners are not getting the tax relief to which they are entitled. Simply put,
the PLD tax is embedded in the property tax imposed by the County in the tax bill without any
fair, equitable, or reliable way to determine that the PLD tax is included or that there is an
opportunity for, and in fact a misplaced burden on, the PLD Property Owner to apply for the
entitled tax exemption.
While the PLD Bill before you today does not remedy all of the issues with the inconsistent
Code provisions in Chapter 60, the lack of County notice or the lack of Constitutional due
process with the PLD tax exemption process, we appreciate the efforts of the Sponsors of the
PLD Bill to quickly act to partially remedy the situation and provide an opportunity for some
relief from the illegally collected PLO taxes for the July 2014 taxation year. The Named Clients
have all made significant investments in the County and generate substantial revenue for the
County, and the County owes them this basic legislative adjustment to a clearly flawed taxation
process and system. Furthermore, approving this PLD Bill will provide a mechanism for other
PLO Property Owners who may not even be aware of the deficient process to cure the deficiency
for this tax year, and we encourage the County Council to enact further legislation to correct the
inequities and legal flaws that have now been surfaced for future years to come.
The Code, Section 60-6(a) ("shall be exempt"), supports that the exemption is entitled and the
Code (Section 60-14[ a]) is legally flawed in requiring an application process to secure the tax
exemption.
3
13­
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LlNOWESI
AND
BLOCHER
LLP
ATTORNEYS AT LAW
The Honorable Craig Rice
October 14,2014
Page 4
Very truly yours,
BLOCHERLLP
pIe
&,uti
1H
1l!.td--
AnneM. Mead
cc:
~l
Faden, Esquire
Dr. Glenn Orlin
Mr. Doug Firstenberg
Mr.
Donald Hague
Mr.
David Hillman
Mr.
Charles Nulsen
Mr. Brian Morrison
Heather Dlhopolsky, Esquire
"L&B 4436359v3/12739.0001
OJ)
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Attachment A
Expedited Bill
43-14,
Parking Lot Districts -Tax Exemptions
This attachment is limited to address the common question of how the Parking lot District
(PLD) tax could go unnoticed upon a reasonable review of a tax bill (putting aside the misplaced
burden of an exemption application due 3 months prior to its receipt), and to take one through
the steps we took to figure out the PlD tax was even being incorrectly included in a Tax Bill.
1) If you review the attached Real Property Tax Bill (annotated example of Silver Spring PLD
Property) - you will note there is NO breakdown of the County Property Tax and County rate of
1.3490 of the assessed property value. There is NO reference or notice to the property being in
a PlD, being assessed a PlD tax (or exemption), and/or potentially being eligible for an
exemption from a PLD tax. There is NO reference to a County Tax Rate Schedule to assess what
is included in the rate or where such schedule can be found (only how to pay the tax bill).
2) After going online to track down the Tax Rate Schedule (see attached) to break down the
"County Property Tax" rate on the Bill, one must match the "tax class" on the tax bill with the
"tax class" on the Schedule and go across the row (Row 48 in our example). One may note the
PlD special service tax area footnote in the row, but it is not clear whether the PlD tax is
included in the total rate and/or whether there is a row for exempt properties (we know now
there is not). The PlD tax is the ONLY tax listed on the Schedule that allows for exemptions (and
again, there is no reference on Tax Bill to potential exemption and/or reference to an
application requirement).
3) Next one must go to the "Total Tax Rate" column, and somehow know to subtract the state
tax rate which is included in the rate and on the chart - even though the tax bill breaks down
State and County taxes separately. Once that figure is obtained, one
may
realize then the
County tax rate on the tax bill does include the PlD tax.
Please note that we did this evaluation of the Tax Bill originally to review PlD tax impacts, so
we were
actively
and
specifically
looking into the PlD tax component. For anyone else,
including individual condominium owners in the PlDs, they would not undergo such analysiS,
reasonably assuming that if their property provided parking in accordance with the County
Code that it was exempt from PLD taxes. They would further reasonably assume the County
would not knowingly bill property owners providing Code parking for the PlD tax in hopes that
property owners would not bother to go through this maze to figure out if PlD taxes were
embedded in the County Tax Rate and just pay the PlD tax for that year (or if they did realize,
pay the PLD tax and then apply for an exemption to which they are automatically entitled the
following April).
Attachments
15
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·.}
REAL PROPERTY CONSOLIDATED TAX BILL
ANNUAL BILL
TAX PERIOD 07/01/2014-06/30/2015
FULL LEVY YEAR
LEVY YEAR 2014
HOME PROPERTIES RIPLEY STREET LLC
850 CLINTON SQ
ROCHESTER, NY 14604-1730
Department of Finance
Division of Treasury
255 Rockville Pike, L-15
(Monroe Street Entrance)
Rockville, MD
20850
Hours:
8:00
a.m. -
4:30
p.m.
Mon. - Fri.
NOT A PRINCIPAL RESIDENCE
BILL DATE
07/07/2014
PROPERTY DESCRIPTION
PAR A E BROOKE LEES
SILVER SPRING
,
,
I
I
LOT
I
BLOCK
DISTRICT
I
UNKNOWN
MORTGAGE INFORMATION
SEE REVERSE
I
3
13
I
I
SUB
I
TAX CLASS
BILL
#
I
ACCOUNT
#
022
PROPERTY ADDRESS
I
RATE
.1120
1.3490
16.7300
R04B
34328490
REFUSE AREA
I
03688410
REFUSE UNITS
1155 RIPLEY ST
ASSESSMENT
78,789,800
7B,789,800
TAX/CHARGE
88,244.58
1,062,874.41
5,872.23
478.07
1,157,469.29
R32
TAX DESCRIPTION
STATE
PRO~ERTYTAX
COUNTY PROPERTY TAX
SbLiD WASTE CHARGE
WATER QUAL PROTECT CHG (NR)
TbTAL
PRIORPAYMENTS­
INTEREST
'PER $100 OF ASSESSMENT
I
351
CURRENT YEAR FULL CASH VALUE
TAXABLE ASSESSMENT
78,789,800
.
..
0
0
CONSTANT YIELD RATE INFORMATION
COUNTY RATE OF 0.732 IS LESS THAN
THE CONSTANT YIELD RATE OF 0.7475 BY
10.0155
--
Annual Amount Due:
Total
PLEASE RETAIN THE TO;:' PORTION FOR YOUR RECORD'S•
1,157,469.29
YOU CAN VIEW AND PAY YOUR BILL ON THE INTERNET AT www.montgomerycountymd.govlfinance
.
-
.....
__
....
REruRN THIS PORTION WITH PAYMENT
REAL PROPERTY CONSOLIDATED
TAX
BILL
TAX PERIOD 07/01/2014 -06/30/2015
FULL LEVY YEAR
CHeck here if
YOIJr
address changed
&
enter change
on,
reverse side.
ACCOUNT
#
34328490
Make Check Payable to:
Montgomery County. MD
lEVY YEAR
AMOUNT DUE
03688410
2014
1157469.29
AMOUNT PAID
DUE
SEP 30 2014
PLEASE INDICATE AMOUNT BEING PAID
HOME PROPERTIES R!PLEY STREET LLC
850 CLINTON SQ
ROCHESTER, NY 14604-1730
20820149343284907011574692950000000000
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M11IlidpaI
Distrlet
Ml
Friendship
Heights
M2
M3
M4
M5
M6
Drnmmond
M7
M8
M9
MIO
11
M12
MI3
MI4
M15
M16
M17
MIS
M19
M20
M2I
M22
M23
Oakmont
Chevy
Chase
Village
Section #3, Village of
Chevy
Chase
Town of Chevy Chase
Section #5, Village
of
Chevy
Chase
Village
of
Martin's Additions
North
Chevy Chase
Chevy Chase VlCW
BaumyPark
City
ofRoekville
City
of
GaithersbllI'g
Town ofBarnesvilJ.e
Town of
Laytonsville
Town ofPoo1esvi1le
Town of
Gao:ett
Park
Town
of
Glen
Echo
Town
of
Somerset
Town of Brookeville
Town ofWuhington Grove
Town of Kensington
City
of
Takoma
Park:
Park:in&
Lot
Distric:t
PI
P2
Silver Spring
(non-commercial)
Silver Spring
(commercial)
P3
P4
P5
P6
P7
P8
P9
Bethesda (non-com.mercial)
Bethesda (commercial)
Wheaton
(non-commercial)
Wbeaton
(commetcial)
Montgomery Hills
(noo-comm!l.tcial)
Montgomery
Hills
(coI!UlleI"Ciai)
Bethesda-BP
(non-commercia1)
Urban histric:t
UI
U3
Silver Spring
Bethesda
Wheaton
US
Noise Abatement Distric:t
Cabin
John
NI
N2
Bradley
DeveIo~
Distric:t
Dl
Kingsview
Village
D2
West Germantown
D3
White
Flint
no
real
property
tax
fur
tax
class 29
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[mdcipaJ District
n
[2
Friendship
Heightll
Drummond
Oakmont
Chevy
Chase
Village
Section:1t3.
Village of Chevy Chase
Town of Olevy
Chase
Section
#5,
Village of Chevy
Chase
Village of Martin's Additions
North
Chevy
Olase
Chevy Chase View
Battery
Parle
City
of
Rockville
City
of Gaithersburg
Town ofBamesville
Town of Laytonsville
Town
of
Poolesville
Town ofGatrettPark
Town
of
Glen
Echo
Town of Somerset
Town of Brookeville
Town
of
Washington
Grove
Town of Kensington
City
ofTakoma Parle
f3
14
is
!I6
f7
48
19
no
m
412
.113
,u4
.115
416
417
418
tU9
420
.,[21
.{22
d23
>arkin&
Lot
District
'1
'2
'3
'4
'5
'6
Silver Spring
(non-commcrcial)
Silver Spring (commercial)
Bethesda
(non-=mmercial)
Bethesda (commercial)
Wheaton
(non-=mmercial)
Wheaton (commcrcial)
Montgomery
Hi1ls
(commerciai)
Bethesda-BP
(non-commcrcial)
n
?8
?9
Mon~am=yHills~on~mm~aJ) ------+-----~_+--~--~~_;~----------t_----------_r----------_+~--~~r_--~~~~~~
Urban
histrict
Silver Spring
Bethesda
Wheaton
Ul
U3
US
Soise
Mlatement
Dlstrlct
N1
Nl
Cabin John
Bradley
Oevelo~
Dlstiict
01
Kingsview Village
D2
West Germantown
03
White
Flint
__. "......._._, tax
for
tax
class
29
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MONTGOMERY
COUNTY
couNcil
Expedited
Bill
43-14,
Parking
Lot
Districts -Tax Exemptions
October 14,
2014
Good afternoon. For the record, my name is Anne Mead with the law firm of Unowes and
Blocher LLP. As noted by my partner, Mr. Dalrymple, we are here today representing affiliate
entities of StonebridgeCarras; Washington Prbperty Companies, Southern Managemerlt and
Home Properties for their properties in variol:.ls County Parking Lot Districts (PLDs) in support of
Expedited Bill 43-14 - PLD Tax Exemptiorls.
:So as not to repeat the comments of others as
t6
the inequitable and egregious nature of the
PLD tax situation, my commehts are limited to afjdress the common question of how the PLD
tax could go unnoticed upon
~
reasonable review of a tax bill (plitting aside the misplaced
burden of an exemption application due 3 months prior to its rel:eipt}, and to take you through
the steps we took to figure out thePLD tax was
~ven
being incorrectly included in a Tax Bill.
1) If you review the attached Real Property Tax Bill (annotated e:xample of Silver Spring PLD
Property) - you will note there is NO breakdown of the County Proper'ty Tax and County rate of
1.3490 of the assessed property value. there is NO reference or notice to the property being in
a PLD, being assessed a PLD
t~x
(or exemption), and/or potentially being eligil3le for an
exemption from a PLD tax. THere is NO
referent~
to a County Tax
Rat~
Schedule to assess what
is included in the rate or where such schedule can be found (onlY hO\if' to pay the tax bill).
2) After we went online to track down trle Tax
R~te
Schedule (see attached)
break down the
"County Rate" on the Bill, we matched the "tax Class" on the tax bill with the ('tax clasg" on the
Schedule and went across the row (ROW 48 in oUr example).
YO~J ma~\
note the PLD special
service tax area footnote in tne row, but it is hot dear whether ttie Pl:D tax is Included in the
total rate and/or whether there is a row for exernpt properties ('We kr'jow now there IS not). The
PLD tax is the ONLY tax listed on the Schedule that allows for exemptibns (and again, there is no
referehce on Tax Bill to poteritial exemption and/or reference td an application
requit~ment).
·3) Next one must go to the "Total Tax Rate" colUmn, and you somehow have to know
subtract the state tax rate wHich is inCluded in
Hie
rate and on the chart - evell though the tax
bill breaks down State and Cdunty taxes separately. Once you obtain tHat figure, you
inay
realize then the County tax rate does include the PLb tax.
Please note that we did this evaluation cif the Tax Bill originally ttl review PlD tax impacts, so
'we were
actively
and
specifically
looking into
th~
PLb tax component. For anyone else', they
'would not undergo such analysis, reasonably assuming that iftheir prbperty provided parking in
accordance with the County Code that was exerr'lr>t from PLD
tax~s,
tHe County would not just
bill them for the PLD tax and wait and see if property owners bothered to go through t:his maze
to figure out if PLD taxes were embedded in the County Tax Rate:
Please support Expedited Bill 43-14. Thank you for your consideratiorl
Of
our commentS.
te
to
If
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6
Testimony for 10/14 Hearing
PLD
Tax
Bill 43-14
• Charles K. Nulsen, III, President and Owner of Washington Property Company
specifically here for two projects Solaire Bethesda (Bethesda PLD) and Solaire Silver
Spring (Silver Spring PLD).
• I would like to thank Councilmembers Berliner and Floreen for sponsoring this Bill.
• I would like to highlight my Silver Spring project in particular. Solaire Silver Spring is an
optional method high-rise residential community containing 300 units.
o I spent over $4 million constructing parking above market need to comply and
avoid PLD parking tax regulations.
o The County acknowledged this project's PLD compliance in writing at both
preliminary plan and site plan approvals and then confirmed in writing our
parking compliance before issuing a C of O.
o The County taxed me for non-compliance for two years at approximately
$240,OOO/year without my knowledge or the knowledge of my real estate tax
consultant - Wilkes Artis. (There is no doubt PLD condo owners incorrectly
paying this tax aren't able to hire tax consultants)
o This inaccurate tax cost me not only $480,000 in cash, but impacted my
permanent financing by millions of dollars.
• I have been asked why
J
didn't catch this when others receive their PlD credit. It is
impossible to see that you are being charged a PLD tax. This fact is highlighted by a
thorough survey of tax payers in the PLD districts. The
~
taxpayers receive PLD
credits on some properties, but incorrectly pay PlD taxes on other properties. It is
simply not a conscious decision.
• We have a mqjor problem in the current PLD tax process and implementation. In it's
worst light, it can be described as bureaucratic theft. Thank you for introducing Bill 43­
14 to deal with the 2014 tax year. I hope you all support it. We have much more work
to do to right this fundamental wrong, bond rating or not!
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GIlEATE.
CHAMIER OF
COMMERCE
SILVER
SPRING
October 23, 2014
The Honorable Craig Rice, President
and Members of the Montgomery County Council
100 Maryland Avenue, 6th Floor
Rockville, Maryland 20850
Re:
Expedited Bill No. 43-14 - Parking Lot Districts-Tax Exemption
Dear Council President Rice and Members of the Council:
On behalf ofthe Board of the Greater Silver Spring Chamber of Commerce, I am writing to express the
Chamber's views on Expedited Bill No. 43-14 - Parking Lot Districts-Tax Exemption.
This Chamber has been a consistent advocate for sustaining and protecting the Silver Spring Parking Lot District
(PLD) and for assuring that the taxes and other monies collected in the Silver Spring PLD remain in Silver
Spring to support the needs of the PLD and the Urban District.
At the same time, we recognize the need to address a lack of transparency in the PLD exemption process. We
understand that Bill 43-14 attempts to address this problem by allowing property owners an extension of time
to
file for the exemption during this calendar year only. The Chamber supports this effort, with the condition that
all monies that may be refunded
to
property owners as a result of the Bill be retumed from the County's General
Fund, and not from the individual PLDs. Given the cumulative health and financial resources all PLDs require,
it would not be prudent or fiscally responsible to source any approved refunds from the PLD's budgets.
Further, in order to streamline the PLD exemption process and avoid this problem in the future, the Board
suggests that Council amend the law to remove the need for property owners to apply for the exemption.
Instead the exemption should be granted automatically where the property provides the requisite parking spaces.
Once the Department of Permitting Services (DPS) determines that a plan has been completed in accordance
with its regulatory approval that includes providing code-required parking, DPS should notifY the Department of
Finance, copying the property owner, that the exemption should be granted.
Finally, the Chamber is concerned some of its members and other property owners and developers may not
know whether they are receiving their lawfully entitled exemptions. Accordingly, the Chamber urges the
Council to consider adding language to the Bill directing the County's Department of Finance to update the
County's real property consolidated tax bill form to better- identifY for property owners their eligibility for the
PLD exemption and whether or not they are receiving the exemption.
As so modified, the Chamber believes this Bill is a strong first step in making the County's PLD taxation
process more straightforward and fair. The Chamber looks forward to continuing to work with the Montgomery
County Council in these efforts and will be happy to respond to any questions.
Thank you for your consideration.
~~
Jane Redicker
President
8601 Georgia Avenue, Suite 203, Silver Spring, Maryland 20910
Phone: 301-565-3777
Fax: 301-565-3377
info @gsscc.org
www.silverspringchamber.com
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OFFICE OF THE COlJNTY EXECUTIVE
ROCKVILLE. MARYLAND
20~50
Isiah Leggett
County Execllfive
MEMORANDUM
october 27,2014
TO:
Craig Rice, President
Montgomery County Council
Joseph F. Beach, DirectoriA--­
Department of Finance
~
FROM:
1f)
.
Arthur Holmes, Jr., Director
M-~
Department of Transportation
SUBJECT:
Expedited Bill 43-14, Parking Lot Districts - Tax: Exemption
In
preparation for this Thursday's hearing at the Transportation and Environment
Committee on the subject legislation we are submitting the foregoing to clarifY certain issues
related to the exemption process and the subject legislation. We look forward to participating in
the Council's deliberations on this important bill.
1.
Comment:
Property owners should not have to go through this cumbersome process
every year.
Response:
An approved exemption from the parking
ad
valorem
tax:
is permanent.
If
a
property changes land use or available parking, on which an exemption is predicated, it is
incumbent on the property owner to inform the County but that has never happened over
the last 15 years.
2.
Comment:
One property owner suggested his property was inspected by the County for
parking requirement and it was deemed satisfactory.
Response:
His property may have been inspected by DPS for use and occupancy, but no
agency of the County has ever inspected the property to verifY it has the code required
parking for its land use. Any property
within
a PLD is exempted from the parking
requirements for its land use for the purposes of obtaining a use and occupancy permit.
It
should be noted that these property owners represented by Linowes and Blocher have not
yet applied for an exemption for the current
tax:
year.
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Craig Rice, Council President
October 27,2014
Page 2
3.
Comment:
It
was suggested that the fiscal impact of granting a retroactive tax exemption
to the individual properties represented is only approximately $600K and that in an
overall County budget of over $5B, the approval of this bill could not affect the County
bond rating.
Response:
The Bethesda revenue bonds are not backed by the full faith and credit of the
County's General Fund and, within the budget of the BethesdaPLD, the approval of this
bill could have a major fiscal impact. FY14 actual tax revenue for Bethesda was
$2,553,832 and Silver Spring was $7,155,730. Therefore, $600,000 represents over 6% of
total taxes collected in both PLDs.
4.
Comment:
There was a suggestion that it should be the responsibility of the County
government to detennine if a property could be exempted from the tax before it is
accessed rather than the property owner's responsibility to file for an exemption.
Response:
In order to do this the County would have to inspect all private property
located in the taxing areas to detennine its land use and available parking before the tax
bills are sent out each year. DOT currently spends an average of 16 hours of staff time to
process a simple exemption request. Since there are currently approximately 3,664 tax
accounts in Silver Spring and Bethesda alone, it would require at least 30 full time staff
to annually inspect the properties and detennine which of these properties should be
required to pay the tax. This is, of course, provided the property owners
will
provide the
inspecting staff access to their property and their tenants to detennine the specific number
of square feet of each land use and the adequacy of the parking provided that the any
exemption detennination must be based upon. Frequently, staffs spend much more time
than this on individual exemption requests that may involve multiple meetings with
property owners and repeated inspections with parking modified to meet the code
requirements.
5.
Comment:
The property owners through their attorney contacted Executive Branch
regarding this issue
in
May and the Executive Branch staff refused to help solve the
problem.
Response:
Actually it was June 18 that for the flIst time we were notified about this case
and it should be noted that the deadline for exemption request can only be changed
through Council action. The Executive Branch has no authority to extend the deadline.
6.
Comment:
Section 60-6 ofthe County Code permits an absolute exemption ifthe Code
level parking is provided:
Response:
This is misleading. Section 60-6 authorizes the exemption and Section 60-14
specifies the process for obtaining the exemption. They are not in conflict. They are in
fact complementary parts of Chapter 60.
7.
Comment:
If property owners missed the deadline this year (and this bill is not enacted),
property owners will be forever barred from applying for a waiver.
2
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Craig Rice, Council President
October 27,2014
Page 3
Response: This is not accurate. Under current law, the property owners can apply next
year (also see the answer to #1 above).
8. Comment: Ifthe property is granted an exemption it does not appear on the bill:
Response: This is incorrect. If a property has been granted the exemption appear as a
credit on the bill (see example below).
l.
ACCOUNT
NUMBER
BILL NO.
PROPERTY ADDRESS
MORTGAGE
OCCUPANCY
UNKNOWN
NOTA
PRINCIPAL
RESIDENCE
PROPERTY DESCRIPTION
PARCELA9
TAX DESCRIPTION
STATE PROPERTY TAX
COUNTY PROPERTY TAX
DISTRICT
13
SOLID WASTE CHARGE
SUB
001
WATER QUAL PROTECT CHG
TOTAL
'
CLASS
R048
CREDIT DESCRIPTION
REFUSE
R34
FULL PARKING LOT CREDIT
AREA
TOTAL CREDITS
REFUSE
37
UNIT
PRIOR PAYMENTS
****
INTEREST
TOTAL AMOUNT
Amount Due
by
10/3112014
LOT
BLOCK
ASSESSMENT RATE
10,349,800 0.l12
10,349,800 1.349
124.24
ASSESSMENT RATE
-10,349,800 .317*
TAX/CHARGE
11,591.78
139,618.81
4,596.88
464.70
156,272.17
AMOUNT
-32,808.87
-32,808.87
$123,463.3
$0.00
$0.00
cc: Isiah Leggett, County Executive
Montgomery County Council
Timothy
L.
Firestine, Chief Administrative Officer
Jennifer Hughes, Director, Office of Management and Budget
Marc P. Hansen, County Attorney
Glenn Orlin, Deputy Council Administrator
Bonnie Kirkland, Assistant Chief Administrative Officer
Michael Faden, Senior Legislative Attorney
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THE
GREATER
BETHESDA-CHEVY CHASE
CHAMBER OF COMMERCE
VIA EMAIL
October 13,2014
The Honorable Craig Rice, President
and Members of the Montgomery County Council
100 Maryland Avenue, 6th Floor
Rockville, Maryland 20850
Re:
Expedited Bill No. 43-14 - Parking Lot Districts-Tax Exemption - SUPPORT
Dear Council President Rice and Members of the County Council:
7910 Woodmont Avenue, Suite 1.204
Bethesda, MD 20814
T.:
(301) 652-4900
F; (301) 657-1.973
stoff@bccchomber.org
www.bccchomber.org
On behalf ofthe more than 600 members of The Greater Bethesda Chevy-Chase Chamber of Commerce (the "B-CC
Chamber"), we are writing in support of Expedited Bill No. 43-14 Parking Lot Districts-Tax Exemption (the "Bill"). The
Bill represents a fair and limited approach to remedying an inequity that has been levied on a number of property owners in
the County's Parking Lot Districts (the "PLDs") for years.
Property tax bills received from the County contain very little information on their face, and it is only through numerous
steps (including a visit to the tax rate schedule on the County's Department of Finance website and a mathematical analysis
to determine which individual taxes are included in the overall County property tax shown on the annual bill) that a property
owner is able to determine which taxes are being levied upon them. Even if a property owner is successful at that analysis
after their annual tax bill arrives in July, if they determine that they are being charged the PLD tax incorrectly (because their
property provides either the full or partial Code-required parking), they have already missed the deadline (the preceding
April) for filing for a PLD tax exemption for the year by over three months. This is an opaque and unfair way to administer
property taxes to our County's property owners - many of whom have invested heavily in this County and whose buildings
and projects provide enormous annual tax revenue to the County. The Bill seeks to partially redress this longstanding
inequity by providing an additional window in which property owners can file for the PLD tax exemption for the current
year. The B-CC Chamber is in support ofthe Bill's proposal.
Notwithstanding our support for the Bill, the B-CC Chamber has expressed concern for a number of years that the existing
funding scheme for services supported by PLD revenue such as the Bethesda Urban Partnership and Bethesda Transportation
Solutions is unsustainable and needs to be evaluated and improved for greater consistency and reliability. The problem that
this bill seeks to address further illustrates the importance of revisiting this funding system and improving its transparency
and predictability, and the B-CC Chamber looks forward to continuing to work with the Montgomery County Council and
the Montgomery County Department ofTransportation in these efforts.
Thank you for your consideration.
Sincerely,
~~MO
Ginanne M. Italiano, 10M
President
&
CEO
2014 Annual Sponsors
Platinum:
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Gold Sponsors:
The Chevy Chase Land Company Pepco
Silver Sponsors:
Arthritis Foundation-Mid Atlantic Region, Cohn Reznick, Grossberg Company LLP,
Lerch,
Early
&
Brewer, Chtd., Linowes
and Blocher LLP, Suburban Hospital
Bronze Sponsors:
Andy Stem's Office Furniture Barwood Transporration - Bond Beebe Accountants
&
Advisors - Clark Construction
Group, LLC ConTemporaries Councilor, Buchanan
&
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&
Marshall PC - DMB
Pictures - Gelman, Rosenberg
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Quick Conneet Sponsor:
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NextExee Sponsor:
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~