GO Item 2
December 12,2016
Worksession
MEMORANDUM
December 8, 2016
TO:
FROM:
SUBJECT:
Government Operations and Fiscal Policy Committee
Amanda Mihill, Legislative Attorney
~
Worksession:
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and
Veterans
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and Veterans, sponsored by Lead
Sponsor then-Council President Floreen and Co-Sponsors Councilmembers Navarro, Rice, and Katz,
was introduced on October 18,2016. A public hearing was held on November 15 (see testimony
and correspondence on ©14-31).
Bill 42-16 would create a property tax credit for certain elderly individuals and veterans.
Specifically, Bill 42-16 would provide a 20% county property tax credit for 5 years on an eligible
individual's home.
An
eligible individual is an individual that is: (1) at least 65 years old and has
lived in the same dwelling for the preceding 40 years; or (2) is at least 65 years old and is a retired
member of the United States armed forces. Finally, and eligible individual may receive a property
tax credit if the home for which they are seeking the credit is assessed at no more than $500,000.
Background
The County has a number of programs to provide tax relief to different subsets of the County
populous, including programs for senior citizens and veterans. These programs include the
property tax credit for seniors of limited income (County Code §52-92), the residential real
property tax deferral for seniors of limited income (County Code §52-22), and the property tax
refund for disabled veterans and blind persons (County Code §52-23).
In
addition to these
programs, senior citizens and veterans may be eligible for other, more generally applicable tax
relief programs, such as the homeowners tax credit (County Code §52-85).
The County was granted the authority to institute the tax credit provided in Bill 42-16 earlier this
year via House Bill 898 (©5-6). The enabling legislation provided for specific definitions for
"eligible individual" (which are repeated in Bill 42-16), and provided for the maximum amount of
property tax credit (no more than 20% of the tax imposed) and the maximum duration of the
property tax credit (up to 5 years). The enabling legislation further allows the County to provide
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for the maximum assessed value of a dwelling eligible for the tax credit and additional eligibility
criteria.
Summary of Public Hearing Testimony and Correspondence
The Council has heard from several residents and interested individuals. Most individuals that
contacted the Council supported Bill 42-16 with amendments (©14-28). Suggested amendments
will be addressed below. Two individuals, Joyce Siegel and Barbara Siegel opposed Bill 42-16. In
their opposition letters, these individuals did not believe that the Council should encourage "aging
in place" for senior residents (©29-31). The County Executive has not taken a position on Bill
42-16.
Issues for Committee Consideration
1. Should eligibility ofthe tax credit be expanded to include retired members ofthe U.S.
Public Health Service and National Oceanic andAtmospheric Administration?
As noted above,
Bill 42-16 would provide for a property tax credit for retired members of the "United States armed
forces" who are at least 65 years old. The Council heard testimony from Captain David Peterson,
on behalf of the Montgomery County Chapter of the Military Officers Association of America,
and received correspondence from Colonel James Currie, on behalf of the Commissioned Officers
Association ofthe U.S. Public Health Service urging the Council to expand the tax credit to include
retired members of the U.S. Public Health Service and National Oceanic and Atmospheric
Administration (©14-19).
Council staff comments: The state enabling legislation for this tax credit limits eligibility
to retired members of the armed forces. The United States armed forces consists of the Air Force,
Army, Coast Guard, Marine Corps, and Navy. These 2 groups are part of the "military services".
Unless the state law is changed, the County implementing law cannot change this eligibility
criteria. The sponsor of Bill 42-16 has been in contact with members of the state delegation and
Council staff understands that legislation is expected to be considered during the next General
Assembly session to broaden the eligibility for the tax credit to include all branches of the military
service. Once that state legislation is adopted, the County can then amend its tax credit to include
the entirety of the military services.
2. Should eligibility for the tax credit be limited to seniors who have lived in their house
for a certain number ofyears?
Bill 42-16 would provide for a tax credit for a person who is at
least 65 years old and has lived in the same dwelling for at least 40 years. Several residents urged
the Council to remove - or reduce - the 40-year requirement (©20-24).
Council staff comments: The state enabling legislation for this tax credit specifically
limits eligibility for the tax credits for senior residents to those who have lived in their house for
at least 40 years. Unless the state law is changed, the County implementing law cannot change this
eligibility criteria.
3. Should the duration ofthe tax credit be limited to
5
years?
Bill 42-16 would provide
for a tax credit for up to 5 years. Mel and Elda Banks expressed their hope that the tax credit could
be renewed every 5 years (©25).
2
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Council staff comments: The state enabling legislation specifies that the property tax
credit may be granted "for a period of up to 5 years" and does not provide for a "renewal" option.
Unless the state law is changed, the County implementing law cannot change this limitation.
4. Should the maximum assessed value of a dwelling be increased?
Bill 42-16 would
limit eligibility of the tax credit to dwellings that have a maximum assessed value of $500,000.
Several residents urged the Council to increase the maximum assessed value, though they offered
different maximum values (©26-28). Resident Pat Garvey suggested including yearly inflation
adjustments to this cap (©28).
Council staff comments: Unlike the issues raised above, the state enabling legislation
allows the County the discretion to set a maximum assessed value of a dwelling or not and to
determine what the maximum assessed value should be. The Fiscal Impact Statement (©xx)
estimates that the revenue loss from the amount oftax credits granted would likely be about $1.14
million per year (assuming that the maximum assessed value was $500,000.). If the maximum
assessed value were increased to $750,000, staff from the Department of Finance estimate that the
revenue loss would likely be about $1.62 million per year. In determining whether to raise the
maximum assessed value cap, Committee members must weigh the benefits to eligible residents
against the significant decline in revenue that is likely to result from increasing the cap.
5. Other recommended amendments.
Bill 42-16 requires that a property owner submit an
application to the Director on or before a date the Director sets. The County Attorney's office
recommends that the law establish the submission deadline and recommended April 1. Council
staff recommendation: amend Bill 42-16 to require a property owner to submit an application by
April 1 each year that the individual wants to receive the credit.
This packet contains:
Bill 42-16
Legislative Request Report
State enabling legislation
Fiscal and Economic Impact statements
Select testimony and written correspondence
Circle
#
1
4
5
7
14
F:\LAW\BILLS\1642 Tax Credit For E1derly-Vet\GO Memo.Docx
3
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Bill No.
42-16
Concerning: Taxation - Prooertv Tax
Credit - Elderly Individuals and
Veterans
Revised: 10/13/2016
Draft No. 4
Introduced:
October 18. 2016
Expires:
April 18. 2018
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
--!..!;No~n.!!::e=____
_ _ _ _ __
ChI _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President Floreen
Co-Sponsors: Councilmembers Navarro, Rice, and Katz
AN
ACT to:
(1)
(2)
(3)
create a property
tax
credit for certain elderly individuals and veterans;
provide for the eligibility for the property
tax
credit; and
generally amend the law relating to property
tax
credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section 52-110, Property
tax
credit - elderly individuals and veterans
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* *
*
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act.'
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BILL
No. 42-16
1
2
3
Sec. 1. Section- 52-110 is added as follows:
52-110. Property tax credit elderly individuals and veterans.
(ill
Definitions.
In this Section, the following words have the meanings
indicated:
Department
means the Department of Finance.
Director
means the Director of the Department or the Director's
designee.
Dwelling
has the same meaning as in §9-105 of the Tax-Property Article
of the Maryland Code.
=
4
5
6
7
8
9
10
11
12
®
Credit.
As authorized
Qy
§9-257 of the Tax-Property Article of the
Maryland Code, an eligible individual may receive
~
credit against the
County property
tax
imposed on the dwelling of an eligible individual.
13
14
15
16
17
18
19
20
21
(£)
Eligibility.
An individual is eligible to receive
~
property tax credit if:
ill
the individual is at least 65 years old and:
(A)
has lived in the same dwelling for at least the preceding 40
years; or
ill)
is
~
retired member of the United States armed forces; and
ill
@
the dwelling for which
~
property
tax
credit is sought has
~
maximum assessed value of $500,000.
Amount and duration
q.f
credit.
ill
ill
The credit allowed under this Section is 20% of the county
property
tax
imposed on the dwelling.
The credit must be granted each year for
~
years if the individual
remains eligible for the credit.
22
23
24
o
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BILL
No.
42-16
25
26
27
W
Application.
ill
A property owner must submit an application to the Director on or
before the date that the Director sets for each year that the
individual remains eligible for the credit.
28
29
30
31
32
33
ill
An
application must:
(A)
be on the form that the Director requires; and
demonstrate that the taxpayer is entitled to the credit.
ill}
Regulations.
The County Executive may issue regulations under Method
2.
to administer this
tax
credit.
Approved:
34
35
Roger Berliner, President, County Council
Date
36
Approved:
37
Isiah Leggett, County Executive
Date
38
This is a correct copy ofCouncil action.
39
Linda M. Lauer, Clerk of the Council
Date
-3 -
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tax
credit for elderly-vet\bill 4.docx
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LEGISLATIVE REQUEST REPORT
Bi1142-16
Taxation
-
Property Tax Credit
-
Elderly Individuals and Veterans
DESCRIPTION:
Bill 42-16 would create a property tax credit for certain elderly
individuals and veterans and provide for the eligibility for the property
tax credit.
During the 2016 legislative session, the General Assembly enacted,
and the Governor signed, House Bill 898 which authorized local
governments to provide for a property tax credit for certain elderly
individuals and veterans.
To implement authority granted by the State.
Finance
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, Legislative Attorney, 240-777-7815
Taxes and credits apply countywide
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIEN CE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
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LAWRENCE
J.
HOGAN,
JR.,
Governor
Chapter 498
(House Bill 898)
AN ACT concerning
Property Tax Credit - Elderly Individuals and Veterans
Ch.498
FOR the purpose of authorizing the Mayor and City Council of Baltimore City and the
governing body of a county or municipal corporation to provide a property tax credit
against the county or municipal corporation property tax imposed on the dwelling of
certain individuals who are elderly or veterans; providing for the amount and
duration of the tax credit; authorizing the Mayor and City Council of Baltimore City
and the governing body of a county or municipal corporation to provide for
c~rtain
matters relating to the tax credit; defining certain terms; providing for the
application of this Act; and generally relating to a property tax credit for certain
individuals who are elderly or veterans.
BY adding to
Article - Tax - Property
Section 9-257
Annotated Code of Maryland
(2012 Replacement Volume and 2015 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article - Tax - Property
9-257.
(A)
(1)
INDICATED.
IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
(2)
TITLE;
"DWELLING" HAS THE MEANING STATED IN
§
9-105
OF THIS
(3)
"ELIGIBLE INDIVIDUAL" MEANS:
AN INDIVIDUAL WHO IS AT LEAST
65
YEARS OLD AND HAS
LIVED IN THE SAME DWELLING FOR AT LEAST THE PRECEDING
40
YEARS; OR
(I)
(II) AN INDIVIDUAL WHO IS AT LEAST
65
YEARS OLD AND IS A
RETIRED MEMBER OF THE ARMED FORCES OF THE UNITED STATES.
-1­
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Ch.498
2016 LAWS OF MARYLAND
(B)
THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE
GOVERNING BODY OF A COUNTY OR MUNICIPAL CORPORATION MAY GRANT, BY LAW,
A PROPERTY TAX CREDIT UNDER THIS SECTION AGAINST THE COUNTY OR
MUNICIPAL CORPORATION PROPERTY TAX IMPOSED ON THE DWELLING OF AN
ELIGIBLE INDIVIDUAL.
(C)
THE PROPERTY TAX CREDIT ALLOWED UNDER THIS SECTION MAY:
NOT EXCEED
20%
OF THE COUNTY OR MUNICIPAL CORPORATION
PROPERTY TAX IMPOSED ON THE PROPERTY; AND
(1)
(2)
BE GRANTED FOR A PERIOD OF UP TO
5
YEARS.
(D)
THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE
GOVERNING BODY OF A COUNTY OR MUNICIPAL CORPORATION MAY PROVIDE, BY
LAW,FOR:
THE MAXIMUM ASSESSED VALUE OF A DWELLING THAT IS
ELIGIBLE FOR THE TAX CREDIT UNDER THIS SECTION;
(1)
(2)
THIS SECTION;
ADDITIONAL ELIGIBILITY CRITERIA FOR THE TAX CREDIT UNDER
REGULATIONS AND PROCEDURES FOR THE APPLICATION AND
UNIFORM PROCESSING OF REQUESTS FOR THE TAX CREDIT; AND
ANY OTHER PROVISION NECESSARY TO CARRY OUT THE TAX
CREDIT UNDER THIS SECTION.
(3)
(4)
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June
1, 2016, and shall be applicable to all taxable years beginning after June 30, 2016.
Approved
by
the Governor,
May
10, 2016.
-2­
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ROCKVILLE,
MARYL\ND
MEMORANDUM
November 8, 2016
TO:
Nancy
Floree~l~
President,
County Council
Jennifer A. H
,~~~~~or. OfficeofMallagen'i~nt
and Budget
Alexandre
A.~. lIf(\..~lJlrector,
Department ofFmance
PElS
for
Bill 42-16, Taxation - Property Tax Credit·- Elderly Individuals and
Veterans
FROM:
SUBJECT:
Please find
attached
the
fiscal and
economic
impact
statements
for
the above­
referertced
legislations.
JAH:fz
tc: Bmmie
Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices ofthe
County
Executive
Joy
Nurmi, Special Assistant to the County Executive
Patrick Lacefield. Director, Public Infonnation Office
David Platt, Department
of
Finance
Dennis
Hetman,
Department
of Finance
Jane Mukira, Office of Management and Budget
Nacem
Mia
Otlice of Management and Budget
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Fiscal Impact Statement
Bill 42-16,
Taxation - Property
Tax
Credit
~
Elderly Indniduals and VeterailS
\
1.
Legislative Summary
Bill 42-16
provid~s
a
property
tax
creditfor certain property
o~ners
who are at least 65
years ofage and either,
(1)
have resided atthe
same
property
for at
least 40
years, or
(2)
are retired from the military. The tax credit is available
to
aU taxpayers who meet these
requirements, iftheir
property's
assessed value
is
no motc
than.
$500,;000.
2.
An
estimate of changes in
CountY
revenues and.expendituresregardlcss of whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions,and methodologies used.
The estimated amount of the credit
granted
in
the fIrst
year
is
approximately
$1
J
4
millio~
which is not currently budgeted in the
FY 17
approved budget.
The Department of Finance. (Department) notes that there ate 189 property
tax
accounts
in the County that have been owned by the same entity for
at.
least 40
y~.
The
Commission on Veterans Affairs provided the Department data
that
was
used
to estimate
that there are approximately 1,964 CoUilty residents who are at least 65
years
ofage and
are
also
retired
:frOII1
the U.S. Anned Forces.
The Department notes that this program will likely have more eligible appIicantsthan all
other County-administered property
tax
credits combined. Therefore, the Depart:ment
believes that it will need one additional fuU-timetax credit administrator (Grade
18
to
23)
to handle this additional workload.
3. Revenue and expenditure estimates l.'Qvering at least the
Dex:t
6 fiscal
years.
The
amount of
tax
credits granted wi111ikely be approximately
$1.
14
mjIlion per year
Over the
next
6 years.
An
~ditional
expenditure fot
a neW
administrative position will
range from
$74,000
to
$94,000
per year, including benefits, depending on the grade of
the position.
..
The revenue loss
would
be
approximately
$6.8
million over
six.
years,
and expenditures
would be between
$444,000 and $564,000
over six
years.
Expenditures ate
primarily
personnel
costs
for administration of the
tax
credits.
The Department of
Finance
currently
administers 18
tax
credit programs
and
two
tax
deferral programs
with
only
one
dedicated position. The scope
and
impact of
this
new
taX
credit program.
though only
incremental on an on-going basis, is such that additional dedicated resources are required
to continue to effectively and
effic~ently
administer these programs.
4.
An
actuarial analysis through the entire amortizatiQnperiod for each bill that would
.
affect retiree pension or group insurance costs.
Not applicable.
5. An estimate of expenditures related to Connty's information techilology (IT)
systems, including :Enterprise Resonrce Planning
(E:RP)
systems.
Page 1 of-4-
®
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Fiscal Impact Statement
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and Veterans
Not applicable.
6. Later actions that may affect future revenue and expenditures
if
the bill authorizes
future spending.
Not applicable.
7.
An
estimate of the stafftilneneeded to implement the bill.
It is estimated that one additional full-time position is needed to properly implement the
tax credit program.
.
.
The Department of Finance currently administers 18
tax
credit programs and two
tax
defefl"dl programs with only one dedicated position. 'The scope and impact ofthis new tax
credit
progr~
though only incremcntalon an on-going basis, is such that additional
dedicated
resources are
needed
to
continue to effectively and efficiently
administer
these
programs.
lnitial implementation should take approximately 60 hours and includes developing
informational material
for print
and for posting on County websites to explain the
program, including the origip. of the program, the application process, and the timing of
the entire
program
(1he
estimated schedule
to
get from the receipt
of
an application
by
the
Department
of
Finance
to
the
actual
posting
of
the
tax.
credit to
the
tax
bill). Initial
implementation includes setting up intemaLtracking
ofappiications
and the credits ina
MS Excel
spreadsheet, to begin the program. It includes working
v.-ith
Finance-IT.
and
possibly DTS,
to
get the initial website(s) running. It also includes training Treasury
Division staff on what to do when they receive applications in the mail, or are asked
questions
by
customers at our two service counters. Initial implementation also includes
making paper copies of application packets
which will
include the informational materiaL
Mter implementation.
initial
administration of the
program
entails accepting applications.
reviewing them, making a decision. caIculatingthe
tax
credits (initially· in MS Excel, but
potentially in a stand ..alone application developed by Finance-IT or DTS) and then
preparing files of
tax
credits for processing
in
the
tax.
system. The number of applications
received in the fitstyearwill likely be clo$C
to
2,000, if not higher. This will require full­
time work for most of the year.
In
addition to the administrative work, the administrator
,viU work with Finance-IT or DTS (or
both)
as the functional lead for developing a
software application specific to tlris
tax
credit, because of the number ofcredits
that
will
likely
be
granted. It is not possible
to
determine
if
a n.ew sofuvare application is
necessary, at tlris time.
Page 2
of..}
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"
Fiscal Impact Statement
.BiU
~1~16,
Taxation -
Property
Tax
Credit~
Elderly Individuals and
Veterans
After the first year, ongoing administration entails accepting applications, reviewing
them, making a decision, calculatin.g the
tax
credits and then preparing
flies
of tax credits
for processing in
the
tax system. For example:
a. For taxpayers who have already received the credit
in
the previous year, ongoing
administration entails certifying that the owner of record who received 1he tax
credit in the previous year remains the owner of record; calculating
the
tax credit
for 1he new year. and preparing files of
tax
credits for processing
in
the
tax
system.
b.
The
administrative workload after the first year is
expected
to be lower, but
the
workload
will
be
more than current staffhave the
ability
to
provide, without
degradation of other customer service related work,
as
noted above.
8. An explanation of how the addition of new staff responsibilities would affect other
duties.
If no additional. staff are granted, these
tax
credits
will
be
scheduled to
be
made after
all
other credits are given, and other work, such as
tax
refunds, will also be delayed in order
to
make
certain
that all
0
f
the
tax credits are
provided
mas
timely a
manner as
possible.
9. An estimate
of costs
when an additional appropriation
is
needed.
Not
applicable.
10.
A description
of
any variable that could affect revenue and cost
estimates.
The number
of
eligible applicants
may be
higher
or lower than estimated.
There
may
be
a
number of applications
that
are ineligible because their property value is over $500,000
or increases
to
over $500,000 over time.
ll. Ranges of revenue or expenditures that
are
uncertain
or
difficult
to
project.
See above.
12.
If
a biD is likely to have no fiscal impact, why
that
is
the case.
Not applicable.
13.
Other
fiscal impacts or comments.
Not
applicable.
Page 3
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Fiscal Impact Statement
,
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and Veterans
14. The following c.ootributed to and c.oncurred with this analysis:
Mike Coveyou, David Platt, Dennis Hetman. Finance
Jane
Mukira, OMB;
Page 4
of4
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Economic Impact Statement
BiU 42-16 Taxation - Property Tax Credit - Elderly Individuals alid Veterans
Background:
Bill 42-16
would create a property tax credit for certain elderly individuals and veterans
and
provide for
the eligibility
for the property
tax
credit.
During
the
2016
legislative session, the
General Assembly enacted, and
the
Governor signed,
Hou..~
Bill 898
which authorized
local
governments
to
provide for a property tax credit for certain elderly individillUs and veterans.
An
individual would be eligible to receive
a
property
tax
credit if:
1.)
ihe individual
is at
least
65
years
old and: (a) has
lived
in
the
same
dwelling for at least ihe preceding 40
years;
or (b)
is
a
retired member of the United States armed forces and 2.) the dwelling for which a property tax
credit
is
sought has a maximum
assessed
value of
$500,000.
t.
The sources
of
information, assumptions, alid methodologies
used.
U.S.
Census Bureau,
2015
American Community Survey
Commission ofVeternnsAffairs, 2Q15report
The Department of Finance
has
fOl1llUlated an estimate of the annual property
tax
credit as a
result of the
Bill
assuming
a
median taxable assessment base of
$325,000 for
properties valued
less
than $500,000, a real
property
tax
rate of
$
1.0264,
and an income
tax
offset credit of
$692.
There
are an
estimated
189
property
tax
accounts in the County
that
have been
owned
by
the
same entity for at least
40
years. The Commission on Veterans
Affairs
provided
data
that
was
used
to
estimate
thai
there are approximately 1,964 men and women
in
the County who are
at
lea')!
65
years of age
and
who are also retired from. the
U.S.
Anned
Forces.
2. A description of any variabJe that could affect the economic impact estimates.
Given the assumed
totals,
the Department of
Finance
estimates the amount ofcredit granted in
the
first
year
to
be
approximately $1.14
million:
.
65+ and 40
years
Retired
Median
Taxable
Assessment
at
or below
$500,000
Weighted Real Property Tax
Rate:FY2017
Income
Tax
offset
(Tax
Credit)
Estimated
Tax Bill
Credit
Bill
42-16;
Section
52-110(d)(1)
Amount of Credit Allowed under Bill
42-16
Number of estimated applicants
Estimate loss
of
Property Tax Revenues
$325,000
$1.0264
$3;335.80
($692.00)
$2,643.80
20.00%
i
I
i
i
!
r
i
I
I
$528.761
189
$99;936
Military
$325,000
$1.0264, .
$3,335.80
!
($6n.OO)
$2,643.80
20.00%
$528.76
1,964
$1,,038,485
$1,138;420
TOTAL ESTIMATED LOSS
Page
lof2
@
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Economic Impact Statement
BiU 42-16 Taxatio.n -Property Tax Credit - Elderly individuals and Veterans
Variables that could affect the economic impact estimate include the number of retired military
and individuals over the age of65 that have lived in the same d\velling for over 40 years. There
is also
the
potential for overlap between
the
two groups
that could
slightly
reduce estimates.
3. The Bill's positive or negative effect,
if
any on employment, spending, Salings,
investment, incomes, and property values
in
the
C(}unty~
Based on the
assumptions
and calculations, Bill 42-16 could have a
de minimis
positive
economic impact on the personal income for those individuals over the age of 65 and retired
military that qualify for the credit. Ott a per household basis
the
credit equates to approximately
$528
per
year for those eligible. On
I.UnacroecoIiorhic
level, the Bin
will
not dramatically
alter
employment, .spending, or property values in any measurable way.
4.
If
a8m is
likely to have no economic impact, why is that the case?
This
legislation
will
have
an economic
impact.
See
paragraph
#3
5. The following contributed to or concurred with this analysis:
David Platt,
Dennis
Hetman,
and Rob
Hagedoo~
Finance.
AIexan·
.
··spmosa,
rrector
Department of Finance
dre~
Pate·
Page 20f2
@
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MonigOlTleryC04rlt}'
Chapter
West
Betl;i~sQa,·.MarYr~ncl20827~(J127
Testimony
re,garding
Council.BH142-1o,
November
15,
.2016
P.O;Box34f27
Good
qfteriib(jh
pr~sident FI9r~et)
ol'1prnembets
of
the
·Cqun,y<;::olJl1¢~I,'1
orrr [)qvid H.
pe.fer~{)h
qnd 10m, here Jqdayonbeholfof the Montgomery­
CQ~n:ty
Chqpter; the loco/affiliate of
the
natiQnat MiUtaryOfficeJ$ A$soGiqtiQn of
America
(MOAA).
MOAA onditsdffiliated
chapters
ore
non-partisan advocQtes
forour
Nation's seven unIformed
s~rvices.
ThisbHI flowsfrorn
State legislation
enactedeartierthlsyear
{HB898},
providing authority
ford
iOCdl
property fax credit
forcertoiri
individUbls, drid
speCifylngcertainconditi6hS
for
efig'ibiHty~,ln
general;
my
ct'!opferm¢rr\oers
SlJPPbrtth~
0cf9P:tiOnoHhis
Ie,gislationby tv\ontgomeryCoqnty"
We
qp,
howeYer~
hqve
q
conqernOPol;Jt
on~
qspect
of
the
b1ll's
provl$ion~,qnq
we seE;:ik
your
assistance
and
~l)pport
fOfOQjqiningornodification tQQoJU,$f its
septionon
eligjbil1ty~
.
Our
concern
regarding
CouncHSm
4:2"
16is
dhlyWitn theifEligibillty'i
provisiOnds
drafted.settion
~2'-1'1
O(c}(
llfB),
provldeseiiglbirlty
f()
(~titE?d
rne,mbers'ofthe
"armed
f()rce~/"
wtJO'CISb
mEiettheOge
requir~ment In,th~.
~nobling
:Stote
legislption; it
is
de~cripedd5"'An
ACTconcerOingprqp¢rty Tax
'Credit --
Elderly
lnciividuols
qnd
Veterans."
There is sornetl)ingof
0
disconneyt
in
this formulation. Maryland
hose
definition of
"veteran~'
used in other Je.gislafion
that is
more ihclvsive,
encompassing
all
seven "uniformedsetvices/
J
DaOust
the
five
Ilarrnedservices.i1ltis
my
chapfer'srespectful request thatour
Coun:ty
Couhcil
recognize
that an.unihfehded ,discrepancy tnaywell $xistJn the sfate
I~gisldtibh,
which
WoUld
need
a
technical correction
inths'coffirngGeneral
As~emblyse~siol"\" W~askthqt
the
Counc11,
bring
thj~
c;::ircutTlstdi1<:::e
tqfh,e
qUentionof
th~
CQunty.'s
House and Senafe pefegqtions, pqrilpl)lqrfyfhosewhb
serVe
on
the
HOl.)s,e
W:oys
ondMeansCommlttee,
qll
of whom
w!:;reCO-:Sponsors
of the
House
bill.
Ihmyoriginal
reading
,of
theenablihg
state
leg,isfafIor'i,
my'c.issurnptJot1
wqs
thdlJt appeared
toindudetooguage
providing
locoljurisdfctions
with d
certai.ha/'T'lcjunt
of
discretkm
insetting
adqitibhal"eligIbiliW
C:rft~tip.'~
Uhqet
Section
9:...2Q7
of
the
T~~Pr9perty
Articl$,
Part DS,ets.
tQrth
"'ThE>., ..
g6V$tt}in9
pq<;:fy
of
a county" ,may
provide,
byJaw.
fqr;
{2} qddifl0naleligibiUty
criteria fQrthe fax
@
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credit
L1hder
this,sootiori.~'
I
W9S
informed
by
your
legIslative
'citt9rn~yj!J~t
recently-suchan
a$s~rnptl9fl
Wos,incorrecf qnd that
only
'0
modifi(::otipntothe
enopHng
Jegislatiqpcoylq
prodLJc~the()vtc:Qrne
my chopfersael<s"
1served
in
two.
of my
country's uniforms
over a
38yedr career. I
can
see
no justifiedexpJonationfor lirnifirtg eHgibilityih this I:egislafion,otherthari
perhaps
a draftingbversighfby
the GenerdlAssembly.Members
of the
Commissiohed
Corps
of
the United Stdtes
Puhlic
Health
Ssr\i:i<;e
dridthe CommisSJqnedCorps,
df
the
Notiondl
Oceahic:dr'"ldAtmqsph~nc
Adrninistrotioh
Jdk~ th~sQme
cornmissIoning oath before
the
flog
of our coynfry,Qs do rnernpers of
the
armed
forqes., For their
~ervice
t09ur Nqtion, they earn andJeceive the sornepay.
entiflemenfs, ondbeneJifs
as those
eorned
by
rnernbers
of
the
otherservices.
They are on
dvty2417/36$,
unlesstheyore<onleave~
and
they
are. alWays
subject
to
orders ta any
assigned duty,and
to
rt3Call.Drdwltlg
ohmy
own
career as
dri example. dUring
my
NvO
late-careet
sed
dutyfourSiri
cOfnmdr'td
Of
NOAA ships,
J
wassub1ectto the same dccounfabiiHies
andtesporrslQlIlties
os
NavYdr'ldCodstGt;Jord officers in
command.Wone
more
cot)ld
p~.$Qid
if
time
petl)ljtted,
Ithihk
ttlis
givt3$
Vqu
q $et"ls9'thqf qlirriitqtiqnon
eUgiQilityi~quite
in~quitabfe.;.thaf
a
feGhniGqlcorr~ctionis
warroote.d.
.'
.
One
lost
fact
thotlshare
with·You is
fhatboth the
pHS Corps
and
the
NOAA
CQrpShave .their
service
headquorters
right
here
in Montgomery
County,
PHS ihRockViIleahd NOAA InSilver
Spring..
.
intended.
ThQnkY9vfqr
yoUr
qttehfiont()theMqAAMpntgomerYGdVnty·C;hapt~f"S
concerns
regargi!)g
this
JegistqtiQP.
His
t:>LJr
hope fhalY()l)
witiYiewtheS,$
cpnstitlJ~nt 90mme.nt~ihthe
helpfUl
spirit
in
whiCh
they
qre
pfferecf
and
'..
.
Cqptqin
David
H.Petersol"l, NOM (Ret}
Presioeot;
Montgomery
CQunty
Chopter
c/o1612 Anamosa WOY
D
'rvvoo'.
d" M
nAond
' ........ .
.. ·e·.. '.,::'
0"1"
f':.
20'855
.
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Commissioned Officers Association
of the
U.S.
Public Health Service
November 10, 2016
Montgomery CoUD1}' Council
100 Maryland ,Avenue
Rockville, MD 20850
Dear Council Members:
Tam writing to you about BiI142-16. which would provide tax relief to certain elderly individuals and
retired veterans. I am Executive Director ofthe Commissioned Officers AssOciation ofthe U.S. Public Health
Service (USPHS), which has
ap~oximately
1100 members
in
Montgomery Coun1}'. Of these perhaps 200 are
retired from the USPHS and might be eligible for this
tax
relief. Including the1\l in your legislation could result,
as
I
am sure you understand. in more officers remaining in Montgomery County after they retire.
The problem that some have identified it is that the Maryland law that
is
the
basis
for the Coun1}'
Council's action uses the term "armed forces" to define those eligible for this
tax
relief.
I
don't believe that this
is actually a problem,
as
Maryland law, Chapter 553, enacted in 2007. includes U.S. Public Health Service
officers and officers of the National Oceanic and Atmospheric Administration
as
being members ofa "milibuy
service" for purposes oftaxation in Maryland. (Copy attached). We believe that"anned forces" and "military
services" are totally syllonymous terms, and that there is therefore no reason to deny PHS and NOAA officers
the benefits of this proposed legislation. Federal law
(42
U.S.Code
213
(d» states that. "Active service of
commissioned officers ofthe [U.S. Public Health] Service shall
be
deemed to
be
active military service in the
Armed Forces of the United States ...... reinforcing our contention that
the
terms "armed forces"
and
"military
services"
are
synonymous. PHS officers are also recognized
as
"veterans" under this statutory provision and are
entitled to all the privileges thereof. (Copy ofstBtute attached).
We therefore urge you
as
members ofthe Montgomery County Council
to
include both PHS and NOAA
officers in your eligibility criteria for
tax
relief. Their numbers are small, but we ask you
to
consider what they
contribute to Montgomery County and
to
our country through their work at the
FDA, NIH,
and other locations
in Montgomery County.
Please do not hesitate to contact me if you need additional information about
the
U.S. Public health
Service and its status under Maryland law.
Sincerely,
James
T.
Currie
Colonel, USA (Ret), Ph.D.
Executive Director
820 I Corporate Drive, Suite 1170, Landover, Maryland 20185 • (30 I) 131-90&0 • FAX (30 I) 131-9084
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MARTIN O'MALLEY.
Governor
Ch. 553
CHAPTER 553
(House Bill 392)
AN ACT
concerning
Income Tax - Subtraction Modification - Military Retirement Income for
Commissioned Officers
FOR the purpose of altering a certain subtraction modification under the State income
tax
for certain military retirement income
to
include certain individuals;
defining certain terms; providing for
the
application of this
Act;
and generally
relating
to
the State income . . taxation
of
certain retirement income.
BY
repealing and reenacting, without amendments,
Article - Tax - General
Section 10-207(a)
Annotated
Code
of
Maryland
(2004 Replacement Volume and 2006 Supplement)
BY
repealing and reenacting, with amendments,
Article - Tax - General
Section 10-207(q)
Annotated Code
of
Maryland
(2004 Replacement Volume and 2006 Supplement)
SECTION
1.
BE
IT
ENACTED BY THE GENERAL ASSEMBLY
OF
MARYLAND.
That the Laws of Maryland read
as
follows:
Article - Tax - General
10-207.
(a)
To the extent included in federal adjusted
gross
income, the amounts
under this section are subtracted
from
the federal adjusted gross income of a resident
to
detennine Maryland adjusted
gross
income.
(q)
(1)
(i)
In
this subsection the following words have the meanings
"Military
service" means:
-1­
indicated.
(ii)
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Ch. 553
2007 LAWS OF MARYLAND
1.
induction into the armed forces of
the
United
States
for training and service under
the
Selective Training and Service Act of
1940
or a
subsequent act of
a
similar naturej
2.
forces of the United States;
3.
forces of the United States;
membership in a reserve component of the armed
membership in
an
active component of the armed
membership
in
the
Maryland
National Guard; or
4.
5.
[with respect
to
a person separated from employment
on or after July
1. 1991,]
active duty with the commissioned corps of the Public Health
Service, the National Oceanic and Atmospheric Administration, or the Coast and
Geodetic Survey.
"Military
retirement income" means retirement income
received as
a
result of
military
service.
(iii)
The subtraction under subsection (a) of
this
section includes the
first
$5,000
of
military
retirement income received by an individual during the
taxable
year.
(2)
SECTION 2. AND BE IT FURTHER ENACTED,
That this
Act
shall take
effect
July 1,
2007.
and shall
be
applicable
to
all taxable years beginning after December 31,
2006.
Approved bythe Governor,
May
17,2007.
-2­
@
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42 U.S. Code
§
213 - Military benefits
Current through Pub. L. 113-234.
(d) Active service deemed active lDilitary service with respect to
laws
administered by
Secretary
~f
Veterans
Affairs
Active service of commissioned officers of the [US Public Health] Service shall
be
deemed to
be
active
military
service in the Anned Forces of the United States for the purposes of all laws
administered
by
the Secretary of Veterans Affairs (except the Servicemen's Indemnity Act of
1951) and section 417 of this title.
(e)
Active service deemed active military service with respect to Servicemembers
Civil
Relief Act
Active setVice of commissioned officers of the Service shall
be
deemed
to be
active milital)'
service in the Armed Forces of the United States for the purposes ofall
rights,
privileges,
immuniti.es. and benefits now or hereafter provided under the Servicemembers Civil Relief Act
(50 Agp. U.S.C. 501 et seq.).
(t)
Active service deemed active military service with respect to anti-discrilDination laws
Active service of commissioned officers of the Service shall
be
deemed to
be
active military
service in the
Anned
Forces of the United States for purposes of all laws related
to
discrimination on
the
basis ofrace, color, sex. etbnicity, age. religion, and disability.
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121512016
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From: "Fred Marks" <fred@fmadirect.com>
Date:
10/31120165:31:56
PM
To: "county.council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc:
Subject: Proprty
tax
credit for seniors
Requiring one residence for 40 years is arbitrary and unfair. My wife and I have lived in just two houses
in
Gaithersburg for 52 years. Ask Sidney, he will confirm that. We are in our eighties and you just jacked up
our property tax by 10% while giving Marriot a huge tax break. We need it; they don't.
Sincerely,
Fred and Patsy Marks
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From: "L CLAUDIA HANLON" <ponydublin@msn.com>
Date: 10/31120163:46:34 PM
To: "county.council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc:
Subject: Nancy Floreen's Bi1142-16
By simple arithmetic, to qualify just on the basis of length of time living in one residence, the owner living
continuous at the same residence for 40 years would have been 20 years old to qualify financially. This
would rarely apply to such a few, if any people at all, considering 40 years ago, would have been 1976
during the administration end (1977) of Ford and Carter 1977 to 1981 during a time of extremely high
interest rates. How long do you expect people to live in large numbers in Montgomery County.
Sounds like very little research was done before putting out the "sweet words" to the seniors living on
pensions whose only asset is a paid off mortgage but low on money for cost ofliving. This idea based on the
info in Nancy Floreen's Newsletter is a total waste of Tax Payers Money. I add that this age to qualify is the
only thing that was considered in my research.
There were other qualifications
&
regulations mentioned that probably just added to the complications of
getting any tax help.
I have lived in Montgomery County since 1950 but not all in the same house. Thank you for your public
service, but this is, in my opinion, not a good idea and a waste of your time
&
tax payer money.
L.C.Hanlon
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1215/2016
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From: "Joan Bull" <BULLJ1@WESTAT.com>
Date:
10/31120163:39:05
PM
To: "county.counci1@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc:
Subject: Bi1142-16
I moved to Montgomery County when I was 2 and, except for a couple years
in
college, have lived here all
my life.
I'll be 65 in a few years. But I won't qualify for the tax credit. You really expect me to have lived at the same
address for at least 40 years? Was this bill designed to help, what, 5 people?
Joan Bull
Kensington, MD
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From: "Robert Jenkins" <rj3684@gmail.com>
Date:
111212016
10:27:16 AM
To: "county.council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>, "Robert
Jenkins" <rj3684@gmail.com>
Cc:
Subject: Bill 42-16
If a person needs to be 65 years old and have lived in the same house for
40 years, That means that in order to qualify for this tax relief you must
have purchased the home prior to the age of 25. Many residents were just
out of college and starting their careers and not able to buy their first
home prior to the age of25, thus severely limiting the numbers of long
term residents that would qualify for this relief. I would like to suggest
that the bill be amended to include any homeowner over the age of 66 and
living in the county for more than 30 years. That would encourage senior
citizens on fixed / retirement incomes to stay in their homes.
Regards
Robert Jenkins
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121512016
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From: "Cindy Davis" <cdavisgo123@gmail.com>
Date: 1115/20163:07:10 PM
To: "county;council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc:
Subject: Bi1l42-l6
Hello,
I'd like to know if the tax credit will be income based in addition to age
based. In addition, it would be more beneficial if the length of time to
have lived in the dwelling is reduced to 25 years. Most people don't live
in the homes they purchased at 20 years old.
Thank you for your time.
*Cindy Davis*
REIMAX Town Center
12505 Park Potomac Ave., Suite #220
Potomac, MD 20854
301-637-9762 Office
301-787-8744 Cell
Email isnotsecu*reorconfidential.REIMAX Town Center and our agents
will NEVER ask you about wiring instructions by email. If you receive any
email requesting bank information or suggesting updated wiring
instructions, it is FRAUD. Do not comply and make sure you inform us
immediately. *
* <http://www.agentssucceedhere.coml>*
httos:J/mccouncil md.l mhostediQ.com/COU NTY_
cou
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From: "Mel Banks" <melbanks@earthlink.net>
Date: 111112016 12:06:08 PM
To: "county.council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc: "eldabanks@earthlink.net" <e1dabanks@earthlink.net>
Subject: Proposed Real Estate Tax Credit for Seniors
Dear Council Members:
As life-long residents of Montgomery County, now retired on fixed income and
facing ever-increasing real estate tax, health care costs, and other
incrementally increasing fees and taxes, we face the choice of living out
our lives here with an eroding standard of living, or relocating to a more
tax friendly state (such as Delaware, with no sales tax, and real estate tax
a third of what it is here.)
We applaud any effort to reduce our taxes, and the proposed 20% real estate
tax
credit for seniors with 40 years in the same home would certainly be a
step in the right direction.
As worded in Ms. Floreen's email of
10/31116,
it sounds as if the annual
credit is only for five years. Is this correct? If so, when the credit
expires we'd be five years older, have lived in the home five more years,
and in more need of the credit than before. Hopefully the credit can be
renewed every five years, assuming we're still in the same house.
Thank you,
Mel and Elda Banks
Silver Spring, MD
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Stanley D. Abrams
15101 EMORY LANE
ROCKVILLE. MARYLAND 20853
TELEPHONE: (301) 460-1030
October 25,2016
Hon. Nancy Floreen, President
Montgomery County Council
County Council Office Building
Sixth Floor
100 Maryland Avenue
Rockville, Maryland 20853
Re:
Bill No. 42-16
Property Taxation Credits
Dear President Floreen:
The above referenced Bill grants a property tax credit to seniors (over age 65) and
veterans who have lived in the same dwelling for at least the preceding 40 years, provided that
that the property does not have a maximum assessed value of $500,000.00. I believe this Bill
should be adopted but with a maximum limit of $750,000.00 for its application.
No one needs to tell you that Montgomery County is an expensive place to own a home
and a $500,000.00 limit on assessed value for those who have lived in a home for 40+ years and
seen assessment rise over that period would not qualify even in areas of modest incomes.
As
an
example even in my own middle income area in Rockville, assessed values 40 years ago were
around $55,000.00 - $60,000.00 and today, they are between $600,000.00 - $650,000.00. This is
not unusual. Even in older down county areas being redeveloped or near metro, such as Silver
Spring, Wheaton, Glenmont and Rockville, property values have escalated. So if you really want
to help seniors and veterans who have invested in
and
improved their homes for four decades or
more and don't want or can't afford to move in a housing market dominated by expensive
condos or expensive rentals, be realistic. Even resale MPDV's in certain areas are
at
or above
$500,000.00 in sales prices.
Please consider this request when the PlIED Committee meets on this Bill.
Thank
You,
'Stan1eyD~
cc:
Councilman George Levanthal
Councilman Hans Reimer
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121512016
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From: "Naomi Yount" <NaomiYount@Westat.com>
Date: 10/31120162:26:03 PM
To: "county.council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc:
Subject: Bi1142-16
Hello,
I am writing in support of the bi1142-16 which offers tax credits to longtime residents however I think the
clause that exempts homeowners of houses that have an assessed value of over $500,000 defeats part of that
bill. There are many longtime residents who bought when the market was very low and have lived here for a
long time, and now their dwelling is worth a lot, but they are not exactly benefiting from that increase in
housing appraisal. They don't want to move, but are suffering from high property taxes.
Please look at the increase of the housing market over 40 years and the average home value and reassess that
max value.
I am decades from qualifying for this so have no vested interest but do think this unfair for the
residents/neighbors I do know who have been here the longest. They need the tax credit just as much as the
next person. Maybe increase the assessed value to more than $800,000?
Thanks
Naomi Yount
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1215/2016
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From: "Patrick Garvey" <garvp l75@verizon.net>
Date: 1111120166:03:02 PM
To: "county.council@montgomerycountymd.gov" <county.council@montgomerycountymd.gov>
Cc: "Councilmember.elrich@montgomerycountymd.gov"
<Councilmember.elrich@montgomerycountymd.gov>,
"Councilmember.Berliner@montgomerycountymd.gov"
<Councilmember.Berliner@montgomerycountymd.gov>
Subject: Tax Credit for long time seniors
Very good idea. Please include yearly inflation adjustments or the $500,000 maximum value will severely
limit this needed tax break. You might consider 35 years as the residential term since many retire after 35
years of working and start to be on limited fixed incomes.
If you keep 40 years as the benchmark, then you eliminate a large number of retirees who must make
decisions to relocate after retirement when fixed incomes are set and not keeping up with inflation. That
additional 5 year gap forces folks to relocate to other locations due to MoCo cost of living index.
Great idea however. Inflation should be part of the proposal. And a thorough examination of 40 yrs. versus
35 years for" long term" residents.
Patrick Garvey
5105 Saratoga Ave
Bethesda Md 20816
Pat Garvey
Sent from my iPad
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From:
Floreen's Office, Councilmember [Councilmember.Floreen@montgomerycountymd.gov]
Sent: Friday, November 04, 2016 10:37:18 AM
To: Council President
Subject: FW: Bill 42-16 draft letter to Council
From: Joyce Siegel [mailto:joybsiegel@aol.com]
Sent: Thursday, November 03, 20164:23 PM
To: Berliner's Office, Councilmember <Councilmember.Berliner@montgomerycountymd.gov>; Eirich's Office,
Councilmember <Councilmember.Elrich@montgomerycountymd.gov>; Floreen's Office, Council member
<Councilmember.Floreen@montgomerycountymd.gov>; councilmemberkatz@montgomerycountymd.gov; Navarro's
Office, Councilmember <Councilmember.Navarro@montgomerycountymd.gov>; Riemer's Office, Councilmember
<Councilmember.Riemer@montgomerycountymd.gov>; Leventhal's Office, Councilmember
<Councilmember.Leventhal@montgomerycountymd.gov>
Subject: Fwd: Bill 42-16 draft letter to Council
I am opposed to Bill 42-16 for a variety of reasons. Most people who purchased their
homes 40 or more years ago have seen the value of their homes increase enormously.
Yes, some have used that equity to get second and third mortgages in order to manage
day-to-day expenses but many others are sitting on the increased equity...even lucky
enough to have money in case assisted living or nursing care is needed and/or for their
children.
My husband and I lived in our home for 46 years. The four bedroom split level, on one
quarter acre, was way too big for two people. The gardening and house maintenance were
getting too much. We sold our house to a young family and moved to a condo within a
walk of metro. Our former home was meant for a family and we were happy to see it
recycled, with the children going to the neighborhood schools. The street we used to live
on has numerous elderly widows ... one in a five bedroom split level. She can't drive. She
can't garden. She's stuck in this huge house. Is that the best use of our housing stock? I
think not.
Older people are being encouraged to age in place but for many that's not the best idea. I
have several friends who are now prisoners of their large houses. They lost their
husbands, decided to stay in their homes and now are totally trapped without the
energy...or even the health to make a positive move. They can't drive any longer and have
become totally dependent on others.
We should put our attention to providing affordable, appropriate housing for older people.
Moving to the condo was the absolutely best thing we could have done. We are active in
our new mixed age, ethnicity and income community. We enjoy the amenities ...a pool, a
walk to metro, a few social programs. We've made new friends and become very active in
the governance of the condo.
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Joyce Siegel
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212
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From:
Floreen's Office, Councilmember [Councilmember.Floreen@montgomerycountymd.gov]
Sent: Thursday, November 03,20162:58:23 PM
To: Council President
Subject: FW: bill 42-16 opposed
From: Barbara Siegel [mailto:barbsiegel@verizon.net]
Sent: Thursday, November 03, 2016 2:07 PM
To: Floreen's Office, Councilmember <Councilmember.Floreen@montgomerycountymd.gov>
Subject: bill 42-16 opposed
Dear Council President Floreen,
I"m writing in opposition to bill 42-16.
Below I have included excerpts from a letter my 83 year old mother is submitting on the subject. I'm sure my
views on 'aging in place' were formed by my mother - a housing activist from way back. She always talked
about moving when they got older and that big houses should be for families.
Additionally, I don't understand why this bill is only geared to people whose homes are under $500,000. Most
people who have lived in the same home for 40 years in MoCo are likely to have homes valued over $500,000.
For example, I bought my house in 93 for $230,000 (downtown Bethesda). A few years later we put an
addition on ($110,000). My home is now worth well over $500,000. Why should we be excluded just because
we bought smart and lived without a car for several years.
I also agree with my mother that the idea of aging in place is a disservice to the elderly. It's very expensive to
live in a home. Where I can cut my own grass and do my own repairs, elderly need to hire help.
It's fine if people want to make the choice to stay in their own homes. That's up to them. I disagree with
County Council encouraging it.
There was a profound difference between the experience of my parents (see below) and my in-laws. My in-laws
stayed in their house until they had to. Within a month of moving my mother-in-law had a huge health set back
- we think because of the confusion caused by the move (my father in law simply couldn't take care of the house
any longer). My in-laws are living a miserable isolated existence while both of my parents are engaged,
independent, and continuing to enjoy life. The true elderly do end up isolated in their single family home. By
allowing them to ignore for as long as possible the unpleasant reality that 'time and tide wait for no man" they
end up waiting until it's too late. If Council wants to make a positive difference in the lives of the elderly
perhaps the better move would be to raise taxes on families that have lived in their house for more than 40 years.
Respectfully,
Barb SIegel
http://look2listen.com
Barb@look21isten.com
Through the process ofgraphic consultation, my clients and I lise drmvings, color, typography and other creative elements to find greater
understanding and solutions ill waJ's that are impossible with conversation alone. The amount ofbrain space dedicated to visual processing is
&>reater than that for all othe,. sensory processing combined: this process builds on our natural illclinations to broaden our thinking and
improve peljormance.
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GO Item 2
December 12,2016
Worksession
MEMORANDUM
December 8, 2016
TO:
FROM:
SUBJECT:
Government Operations and Fiscal Policy Committee
Amanda Mihill, Legislative Attorney
~
Worksession:
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and
Veterans
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and Veterans, sponsored by Lead
Sponsor then-Council President Floreen and Co-Sponsors Councilmembers Navarro, Rice, and Katz,
was introduced on October 18,2016. A public hearing was held on November 15 (see testimony
and correspondence on ©14-31).
Bill 42-16 would create a property tax credit for certain elderly individuals and veterans.
Specifically, Bill 42-16 would provide a 20% county property tax credit for 5 years on an eligible
individual's home.
An
eligible individual is an individual that is: (1) at least 65 years old and has
lived in the same dwelling for the preceding 40 years; or (2) is at least 65 years old and is a retired
member of the United States armed forces. Finally, and eligible individual may receive a property
tax credit if the home for which they are seeking the credit is assessed at no more than $500,000.
Background
The County has a number of programs to provide tax relief to different subsets of the County
populous, including programs for senior citizens and veterans. These programs include the
property tax credit for seniors of limited income (County Code §52-92), the residential real
property tax deferral for seniors of limited income (County Code §52-22), and the property tax
refund for disabled veterans and blind persons (County Code §52-23).
In
addition to these
programs, senior citizens and veterans may be eligible for other, more generally applicable tax
relief programs, such as the homeowners tax credit (County Code §52-85).
The County was granted the authority to institute the tax credit provided in Bill 42-16 earlier this
year via House Bill 898 (©5-6). The enabling legislation provided for specific definitions for
"eligible individual" (which are repeated in Bill 42-16), and provided for the maximum amount of
property tax credit (no more than 20% of the tax imposed) and the maximum duration of the
property tax credit (up to 5 years). The enabling legislation further allows the County to provide
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for the maximum assessed value of a dwelling eligible for the tax credit and additional eligibility
criteria.
Summary of Public Hearing Testimony and Correspondence
The Council has heard from several residents and interested individuals. Most individuals that
contacted the Council supported Bill 42-16 with amendments (©14-28). Suggested amendments
will be addressed below. Two individuals, Joyce Siegel and Barbara Siegel opposed Bill 42-16. In
their opposition letters, these individuals did not believe that the Council should encourage "aging
in place" for senior residents (©29-31). The County Executive has not taken a position on Bill
42-16.
Issues for Committee Consideration
1. Should eligibility ofthe tax credit be expanded to include retired members ofthe U.S.
Public Health Service and National Oceanic andAtmospheric Administration?
As noted above,
Bill 42-16 would provide for a property tax credit for retired members of the "United States armed
forces" who are at least 65 years old. The Council heard testimony from Captain David Peterson,
on behalf of the Montgomery County Chapter of the Military Officers Association of America,
and received correspondence from Colonel James Currie, on behalf of the Commissioned Officers
Association ofthe U.S. Public Health Service urging the Council to expand the tax credit to include
retired members of the U.S. Public Health Service and National Oceanic and Atmospheric
Administration (©14-19).
Council staff comments: The state enabling legislation for this tax credit limits eligibility
to retired members of the armed forces. The United States armed forces consists of the Air Force,
Army, Coast Guard, Marine Corps, and Navy. These 2 groups are part of the "military services".
Unless the state law is changed, the County implementing law cannot change this eligibility
criteria. The sponsor of Bill 42-16 has been in contact with members of the state delegation and
Council staff understands that legislation is expected to be considered during the next General
Assembly session to broaden the eligibility for the tax credit to include all branches of the military
service. Once that state legislation is adopted, the County can then amend its tax credit to include
the entirety of the military services.
2. Should eligibility for the tax credit be limited to seniors who have lived in their house
for a certain number ofyears?
Bill 42-16 would provide for a tax credit for a person who is at
least 65 years old and has lived in the same dwelling for at least 40 years. Several residents urged
the Council to remove - or reduce - the 40-year requirement (©20-24).
Council staff comments: The state enabling legislation for this tax credit specifically
limits eligibility for the tax credits for senior residents to those who have lived in their house for
at least 40 years. Unless the state law is changed, the County implementing law cannot change this
eligibility criteria.
3. Should the duration ofthe tax credit be limited to
5
years?
Bill 42-16 would provide
for a tax credit for up to 5 years. Mel and Elda Banks expressed their hope that the tax credit could
be renewed every 5 years (©25).
2
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Council staff comments: The state enabling legislation specifies that the property tax
credit may be granted "for a period of up to 5 years" and does not provide for a "renewal" option.
Unless the state law is changed, the County implementing law cannot change this limitation.
4. Should the maximum assessed value of a dwelling be increased?
Bill 42-16 would
limit eligibility of the tax credit to dwellings that have a maximum assessed value of $500,000.
Several residents urged the Council to increase the maximum assessed value, though they offered
different maximum values (©26-28). Resident Pat Garvey suggested including yearly inflation
adjustments to this cap (©28).
Council staff comments: Unlike the issues raised above, the state enabling legislation
allows the County the discretion to set a maximum assessed value of a dwelling or not and to
determine what the maximum assessed value should be. The Fiscal Impact Statement (©xx)
estimates that the revenue loss from the amount oftax credits granted would likely be about $1.14
million per year (assuming that the maximum assessed value was $500,000.). If the maximum
assessed value were increased to $750,000, staff from the Department of Finance estimate that the
revenue loss would likely be about $1.62 million per year. In determining whether to raise the
maximum assessed value cap, Committee members must weigh the benefits to eligible residents
against the significant decline in revenue that is likely to result from increasing the cap.
5. Other recommended amendments.
Bill 42-16 requires that a property owner submit an
application to the Director on or before a date the Director sets. The County Attorney's office
recommends that the law establish the submission deadline and recommended April 1. Council
staff recommendation: amend Bill 42-16 to require a property owner to submit an application by
April 1 each year that the individual wants to receive the credit.
This packet contains:
Bill 42-16
Legislative Request Report
State enabling legislation
Fiscal and Economic Impact statements
Select testimony and written correspondence
Circle
#
1
4
5
7
14
F:\LAW\BILLS\1642 Tax Credit For E1derly-Vet\GO Memo.Docx
3
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Bill No.
42-16
Concerning: Taxation - Prooertv Tax
Credit - Elderly Individuals and
Veterans
Revised: 10/13/2016
Draft No. 4
Introduced:
October 18. 2016
Expires:
April 18. 2018
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
--!..!;No~n.!!::e=____
_ _ _ _ __
ChI _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President Floreen
Co-Sponsors: Councilmembers Navarro, Rice, and Katz
AN
ACT to:
(1)
(2)
(3)
create a property
tax
credit for certain elderly individuals and veterans;
provide for the eligibility for the property
tax
credit; and
generally amend the law relating to property
tax
credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section 52-110, Property
tax
credit - elderly individuals and veterans
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* *
*
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act.'
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BILL
No. 42-16
1
2
3
Sec. 1. Section- 52-110 is added as follows:
52-110. Property tax credit elderly individuals and veterans.
(ill
Definitions.
In this Section, the following words have the meanings
indicated:
Department
means the Department of Finance.
Director
means the Director of the Department or the Director's
designee.
Dwelling
has the same meaning as in §9-105 of the Tax-Property Article
of the Maryland Code.
=
4
5
6
7
8
9
10
11
12
®
Credit.
As authorized
Qy
§9-257 of the Tax-Property Article of the
Maryland Code, an eligible individual may receive
~
credit against the
County property
tax
imposed on the dwelling of an eligible individual.
13
14
15
16
17
18
19
20
21
(£)
Eligibility.
An individual is eligible to receive
~
property tax credit if:
ill
the individual is at least 65 years old and:
(A)
has lived in the same dwelling for at least the preceding 40
years; or
ill)
is
~
retired member of the United States armed forces; and
ill
@
the dwelling for which
~
property
tax
credit is sought has
~
maximum assessed value of $500,000.
Amount and duration
q.f
credit.
ill
ill
The credit allowed under this Section is 20% of the county
property
tax
imposed on the dwelling.
The credit must be granted each year for
~
years if the individual
remains eligible for the credit.
22
23
24
o
f:\Iaw\bills\1642 tax credit for elderly-vetlbill 4.docx
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BILL
No.
42-16
25
26
27
W
Application.
ill
A property owner must submit an application to the Director on or
before the date that the Director sets for each year that the
individual remains eligible for the credit.
28
29
30
31
32
33
ill
An
application must:
(A)
be on the form that the Director requires; and
demonstrate that the taxpayer is entitled to the credit.
ill}
Regulations.
The County Executive may issue regulations under Method
2.
to administer this
tax
credit.
Approved:
34
35
Roger Berliner, President, County Council
Date
36
Approved:
37
Isiah Leggett, County Executive
Date
38
This is a correct copy ofCouncil action.
39
Linda M. Lauer, Clerk of the Council
Date
-3 -
f:\law\bills\1642
tax
credit for elderly-vet\bill 4.docx
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LEGISLATIVE REQUEST REPORT
Bi1142-16
Taxation
-
Property Tax Credit
-
Elderly Individuals and Veterans
DESCRIPTION:
Bill 42-16 would create a property tax credit for certain elderly
individuals and veterans and provide for the eligibility for the property
tax credit.
During the 2016 legislative session, the General Assembly enacted,
and the Governor signed, House Bill 898 which authorized local
governments to provide for a property tax credit for certain elderly
individuals and veterans.
To implement authority granted by the State.
Finance
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, Legislative Attorney, 240-777-7815
Taxes and credits apply countywide
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIEN CE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
F:\LAW\BILLS\1642 Tax Credit For Elderly-Vet\LRR.Docx
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LAWRENCE
J.
HOGAN,
JR.,
Governor
Chapter 498
(House Bill 898)
AN ACT concerning
Property Tax Credit - Elderly Individuals and Veterans
Ch.498
FOR the purpose of authorizing the Mayor and City Council of Baltimore City and the
governing body of a county or municipal corporation to provide a property tax credit
against the county or municipal corporation property tax imposed on the dwelling of
certain individuals who are elderly or veterans; providing for the amount and
duration of the tax credit; authorizing the Mayor and City Council of Baltimore City
and the governing body of a county or municipal corporation to provide for
c~rtain
matters relating to the tax credit; defining certain terms; providing for the
application of this Act; and generally relating to a property tax credit for certain
individuals who are elderly or veterans.
BY adding to
Article - Tax - Property
Section 9-257
Annotated Code of Maryland
(2012 Replacement Volume and 2015 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article - Tax - Property
9-257.
(A)
(1)
INDICATED.
IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
(2)
TITLE;
"DWELLING" HAS THE MEANING STATED IN
§
9-105
OF THIS
(3)
"ELIGIBLE INDIVIDUAL" MEANS:
AN INDIVIDUAL WHO IS AT LEAST
65
YEARS OLD AND HAS
LIVED IN THE SAME DWELLING FOR AT LEAST THE PRECEDING
40
YEARS; OR
(I)
(II) AN INDIVIDUAL WHO IS AT LEAST
65
YEARS OLD AND IS A
RETIRED MEMBER OF THE ARMED FORCES OF THE UNITED STATES.
-1­
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Ch.498
2016 LAWS OF MARYLAND
(B)
THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE
GOVERNING BODY OF A COUNTY OR MUNICIPAL CORPORATION MAY GRANT, BY LAW,
A PROPERTY TAX CREDIT UNDER THIS SECTION AGAINST THE COUNTY OR
MUNICIPAL CORPORATION PROPERTY TAX IMPOSED ON THE DWELLING OF AN
ELIGIBLE INDIVIDUAL.
(C)
THE PROPERTY TAX CREDIT ALLOWED UNDER THIS SECTION MAY:
NOT EXCEED
20%
OF THE COUNTY OR MUNICIPAL CORPORATION
PROPERTY TAX IMPOSED ON THE PROPERTY; AND
(1)
(2)
BE GRANTED FOR A PERIOD OF UP TO
5
YEARS.
(D)
THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE
GOVERNING BODY OF A COUNTY OR MUNICIPAL CORPORATION MAY PROVIDE, BY
LAW,FOR:
THE MAXIMUM ASSESSED VALUE OF A DWELLING THAT IS
ELIGIBLE FOR THE TAX CREDIT UNDER THIS SECTION;
(1)
(2)
THIS SECTION;
ADDITIONAL ELIGIBILITY CRITERIA FOR THE TAX CREDIT UNDER
REGULATIONS AND PROCEDURES FOR THE APPLICATION AND
UNIFORM PROCESSING OF REQUESTS FOR THE TAX CREDIT; AND
ANY OTHER PROVISION NECESSARY TO CARRY OUT THE TAX
CREDIT UNDER THIS SECTION.
(3)
(4)
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June
1, 2016, and shall be applicable to all taxable years beginning after June 30, 2016.
Approved
by
the Governor,
May
10, 2016.
-2­
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ROCKVILLE,
MARYL\ND
MEMORANDUM
November 8, 2016
TO:
Nancy
Floree~l~
President,
County Council
Jennifer A. H
,~~~~~or. OfficeofMallagen'i~nt
and Budget
Alexandre
A.~. lIf(\..~lJlrector,
Department ofFmance
PElS
for
Bill 42-16, Taxation - Property Tax Credit·- Elderly Individuals and
Veterans
FROM:
SUBJECT:
Please find
attached
the
fiscal and
economic
impact
statements
for
the above­
referertced
legislations.
JAH:fz
tc: Bmmie
Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices ofthe
County
Executive
Joy
Nurmi, Special Assistant to the County Executive
Patrick Lacefield. Director, Public Infonnation Office
David Platt, Department
of
Finance
Dennis
Hetman,
Department
of Finance
Jane Mukira, Office of Management and Budget
Nacem
Mia
Otlice of Management and Budget
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Fiscal Impact Statement
Bill 42-16,
Taxation - Property
Tax
Credit
~
Elderly Indniduals and VeterailS
\
1.
Legislative Summary
Bill 42-16
provid~s
a
property
tax
creditfor certain property
o~ners
who are at least 65
years ofage and either,
(1)
have resided atthe
same
property
for at
least 40
years, or
(2)
are retired from the military. The tax credit is available
to
aU taxpayers who meet these
requirements, iftheir
property's
assessed value
is
no motc
than.
$500,;000.
2.
An
estimate of changes in
CountY
revenues and.expendituresregardlcss of whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions,and methodologies used.
The estimated amount of the credit
granted
in
the fIrst
year
is
approximately
$1
J
4
millio~
which is not currently budgeted in the
FY 17
approved budget.
The Department of Finance. (Department) notes that there ate 189 property
tax
accounts
in the County that have been owned by the same entity for
at.
least 40
y~.
The
Commission on Veterans Affairs provided the Department data
that
was
used
to estimate
that there are approximately 1,964 CoUilty residents who are at least 65
years
ofage and
are
also
retired
:frOII1
the U.S. Anned Forces.
The Department notes that this program will likely have more eligible appIicantsthan all
other County-administered property
tax
credits combined. Therefore, the Depart:ment
believes that it will need one additional fuU-timetax credit administrator (Grade
18
to
23)
to handle this additional workload.
3. Revenue and expenditure estimates l.'Qvering at least the
Dex:t
6 fiscal
years.
The
amount of
tax
credits granted wi111ikely be approximately
$1.
14
mjIlion per year
Over the
next
6 years.
An
~ditional
expenditure fot
a neW
administrative position will
range from
$74,000
to
$94,000
per year, including benefits, depending on the grade of
the position.
..
The revenue loss
would
be
approximately
$6.8
million over
six.
years,
and expenditures
would be between
$444,000 and $564,000
over six
years.
Expenditures ate
primarily
personnel
costs
for administration of the
tax
credits.
The Department of
Finance
currently
administers 18
tax
credit programs
and
two
tax
deferral programs
with
only
one
dedicated position. The scope
and
impact of
this
new
taX
credit program.
though only
incremental on an on-going basis, is such that additional dedicated resources are required
to continue to effectively and
effic~ently
administer these programs.
4.
An
actuarial analysis through the entire amortizatiQnperiod for each bill that would
.
affect retiree pension or group insurance costs.
Not applicable.
5. An estimate of expenditures related to Connty's information techilology (IT)
systems, including :Enterprise Resonrce Planning
(E:RP)
systems.
Page 1 of-4-
®
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Fiscal Impact Statement
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and Veterans
Not applicable.
6. Later actions that may affect future revenue and expenditures
if
the bill authorizes
future spending.
Not applicable.
7.
An
estimate of the stafftilneneeded to implement the bill.
It is estimated that one additional full-time position is needed to properly implement the
tax credit program.
.
.
The Department of Finance currently administers 18
tax
credit programs and two
tax
defefl"dl programs with only one dedicated position. 'The scope and impact ofthis new tax
credit
progr~
though only incremcntalon an on-going basis, is such that additional
dedicated
resources are
needed
to
continue to effectively and efficiently
administer
these
programs.
lnitial implementation should take approximately 60 hours and includes developing
informational material
for print
and for posting on County websites to explain the
program, including the origip. of the program, the application process, and the timing of
the entire
program
(1he
estimated schedule
to
get from the receipt
of
an application
by
the
Department
of
Finance
to
the
actual
posting
of
the
tax.
credit to
the
tax
bill). Initial
implementation includes setting up intemaLtracking
ofappiications
and the credits ina
MS Excel
spreadsheet, to begin the program. It includes working
v.-ith
Finance-IT.
and
possibly DTS,
to
get the initial website(s) running. It also includes training Treasury
Division staff on what to do when they receive applications in the mail, or are asked
questions
by
customers at our two service counters. Initial implementation also includes
making paper copies of application packets
which will
include the informational materiaL
Mter implementation.
initial
administration of the
program
entails accepting applications.
reviewing them, making a decision. caIculatingthe
tax
credits (initially· in MS Excel, but
potentially in a stand ..alone application developed by Finance-IT or DTS) and then
preparing files of
tax
credits for processing
in
the
tax.
system. The number of applications
received in the fitstyearwill likely be clo$C
to
2,000, if not higher. This will require full­
time work for most of the year.
In
addition to the administrative work, the administrator
,viU work with Finance-IT or DTS (or
both)
as the functional lead for developing a
software application specific to tlris
tax
credit, because of the number ofcredits
that
will
likely
be
granted. It is not possible
to
determine
if
a n.ew sofuvare application is
necessary, at tlris time.
Page 2
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"
Fiscal Impact Statement
.BiU
~1~16,
Taxation -
Property
Tax
Credit~
Elderly Individuals and
Veterans
After the first year, ongoing administration entails accepting applications, reviewing
them, making a decision, calculatin.g the
tax
credits and then preparing
flies
of tax credits
for processing in
the
tax system. For example:
a. For taxpayers who have already received the credit
in
the previous year, ongoing
administration entails certifying that the owner of record who received 1he tax
credit in the previous year remains the owner of record; calculating
the
tax credit
for 1he new year. and preparing files of
tax
credits for processing
in
the
tax
system.
b.
The
administrative workload after the first year is
expected
to be lower, but
the
workload
will
be
more than current staffhave the
ability
to
provide, without
degradation of other customer service related work,
as
noted above.
8. An explanation of how the addition of new staff responsibilities would affect other
duties.
If no additional. staff are granted, these
tax
credits
will
be
scheduled to
be
made after
all
other credits are given, and other work, such as
tax
refunds, will also be delayed in order
to
make
certain
that all
0
f
the
tax credits are
provided
mas
timely a
manner as
possible.
9. An estimate
of costs
when an additional appropriation
is
needed.
Not
applicable.
10.
A description
of
any variable that could affect revenue and cost
estimates.
The number
of
eligible applicants
may be
higher
or lower than estimated.
There
may
be
a
number of applications
that
are ineligible because their property value is over $500,000
or increases
to
over $500,000 over time.
ll. Ranges of revenue or expenditures that
are
uncertain
or
difficult
to
project.
See above.
12.
If
a biD is likely to have no fiscal impact, why
that
is
the case.
Not applicable.
13.
Other
fiscal impacts or comments.
Not
applicable.
Page 3
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Fiscal Impact Statement
,
Bill 42-16, Taxation - Property Tax Credit - Elderly Individuals and Veterans
14. The following c.ootributed to and c.oncurred with this analysis:
Mike Coveyou, David Platt, Dennis Hetman. Finance
Jane
Mukira, OMB;
Page 4
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Economic Impact Statement
BiU 42-16 Taxation - Property Tax Credit - Elderly Individuals alid Veterans
Background:
Bill 42-16
would create a property tax credit for certain elderly individuals and veterans
and
provide for
the eligibility
for the property
tax
credit.
During
the
2016
legislative session, the
General Assembly enacted, and
the
Governor signed,
Hou..~
Bill 898
which authorized
local
governments
to
provide for a property tax credit for certain elderly individillUs and veterans.
An
individual would be eligible to receive
a
property
tax
credit if:
1.)
ihe individual
is at
least
65
years
old and: (a) has
lived
in
the
same
dwelling for at least ihe preceding 40
years;
or (b)
is
a
retired member of the United States armed forces and 2.) the dwelling for which a property tax
credit
is
sought has a maximum
assessed
value of
$500,000.
t.
The sources
of
information, assumptions, alid methodologies
used.
U.S.
Census Bureau,
2015
American Community Survey
Commission ofVeternnsAffairs, 2Q15report
The Department of Finance
has
fOl1llUlated an estimate of the annual property
tax
credit as a
result of the
Bill
assuming
a
median taxable assessment base of
$325,000 for
properties valued
less
than $500,000, a real
property
tax
rate of
$
1.0264,
and an income
tax
offset credit of
$692.
There
are an
estimated
189
property
tax
accounts in the County
that
have been
owned
by
the
same entity for at least
40
years. The Commission on Veterans
Affairs
provided
data
that
was
used
to
estimate
thai
there are approximately 1,964 men and women
in
the County who are
at
lea')!
65
years of age
and
who are also retired from. the
U.S.
Anned
Forces.
2. A description of any variabJe that could affect the economic impact estimates.
Given the assumed
totals,
the Department of
Finance
estimates the amount ofcredit granted in
the
first
year
to
be
approximately $1.14
million:
.
65+ and 40
years
Retired
Median
Taxable
Assessment
at
or below
$500,000
Weighted Real Property Tax
Rate:FY2017
Income
Tax
offset
(Tax
Credit)
Estimated
Tax Bill
Credit
Bill
42-16;
Section
52-110(d)(1)
Amount of Credit Allowed under Bill
42-16
Number of estimated applicants
Estimate loss
of
Property Tax Revenues
$325,000
$1.0264
$3;335.80
($692.00)
$2,643.80
20.00%
i
I
i
i
!
r
i
I
I
$528.761
189
$99;936
Military
$325,000
$1.0264, .
$3,335.80
!
($6n.OO)
$2,643.80
20.00%
$528.76
1,964
$1,,038,485
$1,138;420
TOTAL ESTIMATED LOSS
Page
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Economic Impact Statement
BiU 42-16 Taxatio.n -Property Tax Credit - Elderly individuals and Veterans
Variables that could affect the economic impact estimate include the number of retired military
and individuals over the age of65 that have lived in the same d\velling for over 40 years. There
is also
the
potential for overlap between
the
two groups
that could
slightly
reduce estimates.
3. The Bill's positive or negative effect,
if
any on employment, spending, Salings,
investment, incomes, and property values
in
the
C(}unty~
Based on the
assumptions
and calculations, Bill 42-16 could have a
de minimis
positive
economic impact on the personal income for those individuals over the age of 65 and retired
military that qualify for the credit. Ott a per household basis
the
credit equates to approximately
$528
per
year for those eligible. On
I.UnacroecoIiorhic
level, the Bin
will
not dramatically
alter
employment, .spending, or property values in any measurable way.
4.
If
a8m is
likely to have no economic impact, why is that the case?
This
legislation
will
have
an economic
impact.
See
paragraph
#3
5. The following contributed to or concurred with this analysis:
David Platt,
Dennis
Hetman,
and Rob
Hagedoo~
Finance.
AIexan·
.
··spmosa,
rrector
Department of Finance
dre~
Pate·
Page 20f2
@
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MonigOlTleryC04rlt}'
Chapter
West
Betl;i~sQa,·.MarYr~ncl20827~(J127
Testimony
re,garding
Council.BH142-1o,
November
15,
.2016
P.O;Box34f27
Good
qfteriib(jh
pr~sident FI9r~et)
ol'1prnembets
of
the
·Cqun,y<;::olJl1¢~I,'1
orrr [)qvid H.
pe.fer~{)h
qnd 10m, here Jqdayonbeholfof the Montgomery­
CQ~n:ty
Chqpter; the loco/affiliate of
the
natiQnat MiUtaryOfficeJ$ A$soGiqtiQn of
America
(MOAA).
MOAA onditsdffiliated
chapters
ore
non-partisan advocQtes
forour
Nation's seven unIformed
s~rvices.
ThisbHI flowsfrorn
State legislation
enactedeartierthlsyear
{HB898},
providing authority
ford
iOCdl
property fax credit
forcertoiri
individUbls, drid
speCifylngcertainconditi6hS
for
efig'ibiHty~,ln
general;
my
ct'!opferm¢rr\oers
SlJPPbrtth~
0cf9P:tiOnoHhis
Ie,gislationby tv\ontgomeryCoqnty"
We
qp,
howeYer~
hqve
q
conqernOPol;Jt
on~
qspect
of
the
b1ll's
provl$ion~,qnq
we seE;:ik
your
assistance
and
~l)pport
fOfOQjqiningornodification tQQoJU,$f its
septionon
eligjbil1ty~
.
Our
concern
regarding
CouncHSm
4:2"
16is
dhlyWitn theifEligibillty'i
provisiOnds
drafted.settion
~2'-1'1
O(c}(
llfB),
provldeseiiglbirlty
f()
(~titE?d
rne,mbers'ofthe
"armed
f()rce~/"
wtJO'CISb
mEiettheOge
requir~ment In,th~.
~nobling
:Stote
legislption; it
is
de~cripedd5"'An
ACTconcerOingprqp¢rty Tax
'Credit --
Elderly
lnciividuols
qnd
Veterans."
There is sornetl)ingof
0
disconneyt
in
this formulation. Maryland
hose
definition of
"veteran~'
used in other Je.gislafion
that is
more ihclvsive,
encompassing
all
seven "uniformedsetvices/
J
DaOust
the
five
Ilarrnedservices.i1ltis
my
chapfer'srespectful request thatour
Coun:ty
Couhcil
recognize
that an.unihfehded ,discrepancy tnaywell $xistJn the sfate
I~gisldtibh,
which
WoUld
need
a
technical correction
inths'coffirngGeneral
As~emblyse~siol"\" W~askthqt
the
Counc11,
bring
thj~
c;::ircutTlstdi1<:::e
tqfh,e
qUentionof
th~
CQunty.'s
House and Senafe pefegqtions, pqrilpl)lqrfyfhosewhb
serVe
on
the
HOl.)s,e
W:oys
ondMeansCommlttee,
qll
of whom
w!:;reCO-:Sponsors
of the
House
bill.
Ihmyoriginal
reading
,of
theenablihg
state
leg,isfafIor'i,
my'c.issurnptJot1
wqs
thdlJt appeared
toindudetooguage
providing
locoljurisdfctions
with d
certai.ha/'T'lcjunt
of
discretkm
insetting
adqitibhal"eligIbiliW
C:rft~tip.'~
Uhqet
Section
9:...2Q7
of
the
T~~Pr9perty
Articl$,
Part DS,ets.
tQrth
"'ThE>., ..
g6V$tt}in9
pq<;:fy
of
a county" ,may
provide,
byJaw.
fqr;
{2} qddifl0naleligibiUty
criteria fQrthe fax
@
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credit
L1hder
this,sootiori.~'
I
W9S
informed
by
your
legIslative
'citt9rn~yj!J~t
recently-suchan
a$s~rnptl9fl
Wos,incorrecf qnd that
only
'0
modifi(::otipntothe
enopHng
Jegislatiqpcoylq
prodLJc~the()vtc:Qrne
my chopfersael<s"
1served
in
two.
of my
country's uniforms
over a
38yedr career. I
can
see
no justifiedexpJonationfor lirnifirtg eHgibilityih this I:egislafion,otherthari
perhaps
a draftingbversighfby
the GenerdlAssembly.Members
of the
Commissiohed
Corps
of
the United Stdtes
Puhlic
Health
Ssr\i:i<;e
dridthe CommisSJqnedCorps,
df
the
Notiondl
Oceahic:dr'"ldAtmqsph~nc
Adrninistrotioh
Jdk~ th~sQme
cornmissIoning oath before
the
flog
of our coynfry,Qs do rnernpers of
the
armed
forqes., For their
~ervice
t09ur Nqtion, they earn andJeceive the sornepay.
entiflemenfs, ondbeneJifs
as those
eorned
by
rnernbers
of
the
otherservices.
They are on
dvty2417/36$,
unlesstheyore<onleave~
and
they
are. alWays
subject
to
orders ta any
assigned duty,and
to
rt3Call.Drdwltlg
ohmy
own
career as
dri example. dUring
my
NvO
late-careet
sed
dutyfourSiri
cOfnmdr'td
Of
NOAA ships,
J
wassub1ectto the same dccounfabiiHies
andtesporrslQlIlties
os
NavYdr'ldCodstGt;Jord officers in
command.Wone
more
cot)ld
p~.$Qid
if
time
petl)ljtted,
Ithihk
ttlis
givt3$
Vqu
q $et"ls9'thqf qlirriitqtiqnon
eUgiQilityi~quite
in~quitabfe.;.thaf
a
feGhniGqlcorr~ctionis
warroote.d.
.'
.
One
lost
fact
thotlshare
with·You is
fhatboth the
pHS Corps
and
the
NOAA
CQrpShave .their
service
headquorters
right
here
in Montgomery
County,
PHS ihRockViIleahd NOAA InSilver
Spring..
.
intended.
ThQnkY9vfqr
yoUr
qttehfiont()theMqAAMpntgomerYGdVnty·C;hapt~f"S
concerns
regargi!)g
this
JegistqtiQP.
His
t:>LJr
hope fhalY()l)
witiYiewtheS,$
cpnstitlJ~nt 90mme.nt~ihthe
helpfUl
spirit
in
whiCh
they
qre
pfferecf
and
'..
.
Cqptqin
David
H.Petersol"l, NOM (Ret}
Presioeot;
Montgomery
CQunty
Chopter
c/o1612 Anamosa WOY
D
'rvvoo'.
d" M
nAond
' ........ .
.. ·e·.. '.,::'
0"1"
f':.
20'855
.
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Commissioned Officers Association
of the
U.S.
Public Health Service
November 10, 2016
Montgomery CoUD1}' Council
100 Maryland ,Avenue
Rockville, MD 20850
Dear Council Members:
Tam writing to you about BiI142-16. which would provide tax relief to certain elderly individuals and
retired veterans. I am Executive Director ofthe Commissioned Officers AssOciation ofthe U.S. Public Health
Service (USPHS), which has
ap~oximately
1100 members
in
Montgomery Coun1}'. Of these perhaps 200 are
retired from the USPHS and might be eligible for this
tax
relief. Including the1\l in your legislation could result,
as
I
am sure you understand. in more officers remaining in Montgomery County after they retire.
The problem that some have identified it is that the Maryland law that
is
the
basis
for the Coun1}'
Council's action uses the term "armed forces" to define those eligible for this
tax
relief.
I
don't believe that this
is actually a problem,
as
Maryland law, Chapter 553, enacted in 2007. includes U.S. Public Health Service
officers and officers of the National Oceanic and Atmospheric Administration
as
being members ofa "milibuy
service" for purposes oftaxation in Maryland. (Copy attached). We believe that"anned forces" and "military
services" are totally syllonymous terms, and that there is therefore no reason to deny PHS and NOAA officers
the benefits of this proposed legislation. Federal law
(42
U.S.Code
213
(d» states that. "Active service of
commissioned officers ofthe [U.S. Public Health] Service shall
be
deemed to
be
active military service in the
Armed Forces of the United States ...... reinforcing our contention that
the
terms "armed forces"
and
"military
services"
are
synonymous. PHS officers are also recognized
as
"veterans" under this statutory provision and are
entitled to all the privileges thereof. (Copy ofstBtute attached).
We therefore urge you
as
members ofthe Montgomery County Council
to
include both PHS and NOAA
officers in your eligibility criteria for
tax
relief. Their numbers are small, but we ask you
to
consider what they
contribute to Montgomery County and
to
our country through their work at the
FDA, NIH,
and other locations
in Montgomery County.
Please do not hesitate to contact me if you need additional information about
the
U.S. Public health
Service and its status under Maryland law.
Sincerely,
James
T.
Currie
Colonel, USA (Ret), Ph.D.
Executive Director
820 I Corporate Drive, Suite 1170, Landover, Maryland 20185 • (30 I) 131-90&0 • FAX (30 I) 131-9084
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MARTIN O'MALLEY.
Governor
Ch. 553
CHAPTER 553
(House Bill 392)
AN ACT
concerning
Income Tax - Subtraction Modification - Military Retirement Income for
Commissioned Officers
FOR the purpose of altering a certain subtraction modification under the State income
tax
for certain military retirement income
to
include certain individuals;
defining certain terms; providing for
the
application of this
Act;
and generally
relating
to
the State income . . taxation
of
certain retirement income.
BY
repealing and reenacting, without amendments,
Article - Tax - General
Section 10-207(a)
Annotated
Code
of
Maryland
(2004 Replacement Volume and 2006 Supplement)
BY
repealing and reenacting, with amendments,
Article - Tax - General
Section 10-207(q)
Annotated Code
of
Maryland
(2004 Replacement Volume and 2006 Supplement)
SECTION
1.
BE
IT
ENACTED BY THE GENERAL ASSEMBLY
OF
MARYLAND.
That the Laws of Maryland read
as
follows:
Article - Tax - General
10-207.
(a)
To the extent included in federal adjusted
gross
income, the amounts
under this section are subtracted
from
the federal adjusted gross income of a resident
to
detennine Maryland adjusted
gross
income.
(q)
(1)
(i)
In
this subsection the following words have the meanings
"Military
service" means:
-1­
indicated.
(ii)
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Ch. 553
2007 LAWS OF MARYLAND
1.
induction into the armed forces of
the
United
States
for training and service under
the
Selective Training and Service Act of
1940
or a
subsequent act of
a
similar naturej
2.
forces of the United States;
3.
forces of the United States;
membership in a reserve component of the armed
membership in
an
active component of the armed
membership
in
the
Maryland
National Guard; or