AGENDA ITEM #4B
April 22, 2014
Introduction
MEMORANDUM
April 18,2014
TO:
County Council
FROM:
SUBJECT:
Josh Hamlin, Legislative
Attome~
Introduction:
Bill 22-14, Property Tax - Rent Reduction Tax Credit
Bill 22-14, Property Tax - Rent Reduction Tax Credit, sponsored by Council Vice
President Leventhal and Councilmembers Berliner, EIrich, and Floreen, is scheduled to be
introduced on April 22, 2014. A public hearing will be scheduled at a later date.
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. Bill 22-14
would also require the Executive to adopt regulations to administer the credit, including income­
and asset-based eligibility requirements for tenants.
This packet contains:
Bill 22-14
Legislative Request Report
Md. Tax-Property Code, §9-219
Circle
#
1
5
6
F:\LAW\BILLS\l422 Rent Reduction Tax Credit\Intro Memo.Doc
 PDF to HTML - Convert PDF files to HTML files
Bill No.
22-14
Rent
Concerning: ProDertv Tax -
Reduction Tax Credit
Revised:
04/11/2014
Draft No. 3
Introduced:
April 22. 2014
Expires:
October 22. 2015
Enacted: _--,-_ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _ _ _ _ _ _ _ __
Ch, _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council Vice President Leventhal and Councilmembers Berliner, Eirich, and Floreen
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
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
Bill No. 22-14
1
Sec. 1. Section 52-18T is added as follows:
52-18T.
Property tax credit
2
3
=
reduced rent for elderly or disabled tenants.
W
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
4
5
6
7
asset-based eligibility requirements established
Qy
regulation under
subsection
ill
and:
8
9
10
11
12
ill
ill
is at least 65 years old;
has been found permanently and totally disabled and has
qualified for benefits under:
fA}
the Social Security Act;
the Railroad Retirement Act;
any federal act for members of the United States armed
forces; or
au
(Q
13
14
15
16
{ill
any federal retirement system; or
ill
has been found permanently and totally disabled
Qy
the County
health officer.
17
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
Reduced rent
means rent charged to an elderly or disabled tenant that
25
is at least 15% less than market rent.
Rent reduction
means the difference between the market rent and
26
27
reduced rent for the dwelling.
F:\LAW\BILLS\1422 Rent Reduction Tax Credit\BiIl4.Doc
 PDF to HTML - Convert PDF files to HTML files
Bill No. 22-14
28
Tax-Property Article
means the Tax-Property Article of the Maryland
Code.
29
30
31
32
®
Credit.
As authorized
:by
§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.
{£}
33
34
Amount Q[Credit.
ill
The credit allowed under this Section is 50% of the total rent
reductions provided
:by
the owner to elderly or disabled tenants
during the tax year.
35
36
37
38
39
40
ill
A credit granted to
~
person under this Section must not exceed
the amount of County property tax paid
:by
the person in the tax
year in which the credit is granted.
@
Annual aggregate limit.
41
42
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.
43
44
m
ill
Credits must be granted in the order in which the Department of
Finance receives complete applications under subsection
@
A complete application that, if granted, would cause the limit
set in paragraph
45
46
47
48
49
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.
50
51
52
W
Application.
ill
A property owner must submit an application to the Director on
or before the date that the Director sets.
53
54
m
An application must:
(A)
be on the form that the Director requires; and
CD
F:\LAW\BILLS\1422 Rent Reduction Tax Credit\BiIl4.Doc
 PDF to HTML - Convert PDF files to HTML files
55
56
57
58
59
60
.an
ill
Regulations.
demonstrate that the taxpayer is entitled to the credit.
The County Executive must adopt regulations under
administer this Section, including income- and asset­
method
ill
to
based tenant eligibility requirements.
(g)
Applicability.
The credit authorized
Qy
this Section applies to any tax
year beginning after June 30, 2014.
Approved:
61
62
63
64
Craig
L.
Rice,
Presiden~
County Council
Date
65
66
Approved:
67
68
Isiah Leggett, County Executive
Date
69
This is a correct copy ofCouncil action.
70
71
72
Linda M. Lauer, Clerk ofthe Council
Date
F:\LAW\BILLS\1422 Rent Reduction Tax Credit\BiIl4.Doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 22-14
Rent Reduction Tax Credit
Property Tax
DESCRIPTION:
Bi1l22-14 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:
PENALTIES:
Not applicable.
F:\LAW\BILLS\1422 Rent Reduction Tax Cn:dit\LEGISLA TIVE REQUEST REPORT,Doc
 PDF to HTML - Convert PDF files to HTML files
Page 1
®
.
LexisNexisc;
loflDOCUMENT
Annotated Code ofMaryland
Copyright 2014 by Matthew Bender and Company, Inc., a member of the LexisNexis Group
All rights reserved.
***
Statutes
curr~t
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 of Baltimore 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:
(1) 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 ofthe 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;
 PDF to HTML - Convert PDF files to HTML files
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
SO
State Surveys, Legislation
&
Regulations
Archaeological and Historic Sites