AGENDA ITEM 5
April 26, 2016
Public Hearing
MEMORANDUM
April 22, 2016
TO:
FROM:
County Council
Amanda Mihill, Legislative Attomeyoh
l
Jacob Sesker, Senior Legislative Analyst
W
/-6
Residential Real Property Tax
SUBJECT:
Public Hearing:
Expedited Bill 10-16, Taxation
Deferral - Senior Citizens
Expedited Bill 10-16, Taxation Residential Real Property Tax Deferral - Senior Citizens,
sponsored by Lead Sponsors Vice President Berliner and Councilmembers Katz and Riemer and
Co-Sponsors Council President Floreen and Councilmembers Rice, Navarro, EIrich, and Hucker
was introduced on April 5, 2016. A Government Operations and Fiscal Policy Committee
worksession is tentatively scheduled for May 4.
Bill 10-16 would provide for a residential real property tax deferral for residents at least 65 years
old
with
a gross income of $80,000.
This packet contains:
Expedited Bill 10-16
Legislative Request Report
Circle
#
1
5
F:\LAW\BILLS\161O Senior Tax Deferral\PH Memo.Docx
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Expedited Bill No.
10-16
Concerning: Taxation - Residential Real
Property Tax Deferral - Senior
Draft No. _1_
Revised:
3/10/2016
Introduced:
Apri15,2016
Expires:
October 5, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Sunset Date: -:....:.No=n:::,e-:----::-_ _ ___
Ch. _ _, Laws of Mont Co. _ __
Eff~ve: _~--------
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Vice President Berliner and Councilmembers Katz and Riemer
Co-Sponsor: Council President Floreen
AN EXPEDITED ACT
to:
(1) provide for a residential real property tax deferral for certain residents; and
(2) generally amend the County taxation law.
By amending
Montgomery County Code
Chapter 52, Taxation
Section 52-18F
Boldface
Underlining
[Single boldface brackets]
Double underlinina
[[Double boldface brackets]]
* * *
Heading or defined term.
Addedto existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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ExPEDITED BILL
No.
10-16
1
Sec.
I.
Section 52-18F is amended as follows:
52-18F. Residential real property tax deferral[-General].
(a)
Definitions.
In this Section the following words have the meanings
indicated:
Dependent
means a dependent under Section 152 ofthe Internal Revenue
Code.
[(
1)
2
3
4
5
6
7
"Director"]
Director
means the Director of the Department of
Finance.
8
9
[(2)
"Legal interest"]
Legal interest
has the meaning stated in Section
9-104 ofthe Tax-Property Article ofthe Maryland Code.
10
11
[(3)
"Owner"]
Owner
means an individual who has a legal interest in
residential real property.
12
13
(b)
Authorization; Amount of Deferral.
An owner may defer payment of
County property taxes due on residential real property occupied by the
owner as the owner's principal residence if the owner meets the
requirements of this Section. The amount of taxes that may be deferred
for anyone year is the amount that County taxes due exceeds the amount
of County property taxes paid in the prior taxable year.
(c)
Program Eligibility.
An
owner is eligible for a payment deferral under
this Section if:
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15
16
17
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19
20
21
22
(1)
CA)
the gross mcome or combined gross income of all
individuals who actually reside in the dwelling (except a
dependent [under Section 152 of the Internal Revenue
Code] or a person who pays reasonable fixed charges for
rent or room and board), did not exceed $120,000 for the
calendar year that immediately precedes the taxable year for
which the deferral is sought; and
f:\Iaw\bills\1610 senior
tax
deferral\bill1.docx
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24
25
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ExPEDITED BILL
No. 10-16
1
[(2)]
ill)
the owner, or at least one ofthe owners, has resided in the
dwelling as that person's principal place of residence for 5
consecutive years and continues to occupy the property for
that
purpose[.]~
or
2
3
4
5
6
7
ill
(A)
the owner is at least 65 years old; and
ill)
the gross income or combined gross Income of all
individuals who actually reside in the dwelling (except
~
dependent or
~
person who
OO§
8
reasonable fixed charges
9
10
11
for rent or room and board), did not exceed $80,000 for the
calendar year that immediately precedes the taxable year for
which the deferral is sought.
For purposes of income determination under paragraph [(1)]
12
W,
and to
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15
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the extent consistent with this Section, gross income or combined gross
income must be calculated in accordance with Section 9-104 of the Tax­
Property Article ofthe Maryland Code.
*
(f)
*
*
Interest.
ill
[Interest] Except as provided in paragraph
(f1
interest accrues on
the deferred taxes at a rate set annually by the Director that does
not exceed the prime lending rate generally available on June 1 of
the preceding fiscal year.
The regulations adopted under
20
21
22
23
subsection
(q)
must specify the source or sources that the Director
must use to calculate the prime rate generally available on June 1
of each year. The annual interest rate set by the Director applies
to any
tax
deferred that year, regardless of the year when the
tax
was first deferred.
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25
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ill
Notwithstanding paragraph
ill
for deferrals for
owners eligible
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tax
deferral\bill1.docx
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ExPEDITED BILL
No. 10-16
1
2
under paragraph (c)(2), the interest accrues on the deferred taxes
at
~
rate of 0.0% or another amount set
Qy
Council resolution.
3
*
(h)
*
*
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5
6
7
8
9
10
Limits on Deferrals.
The accumulation of deferred taxes and accrued
interest must not exceed [50 percent] 50% of the full cash value of the
property, as determined by the Supervisor of Assessments, or a lesser
amount elected by the taxpayer and specified in the agreement required
under subsection
(1).
When the maximum amounts have been reached,
those amounts may continue to be deferred until any of the events
specified in subsection (k) occur.
An
owner who receives a tax deferral
under this Section must not also receive a tax deferral under Section
52-18C.
11
12
13
14
15
16
*
Sec. 2.
*
*
Expedited Effective Date.
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on July 1,2016.
Approved:
17
18
Nancy Floreen, President, County Council
19
Approved:
Date
20
Isiah Leggett, County Executive
21
This is a correct copy o/Council action.
Date
22
Linda M. Lauer, Clerk ofthe Council
Date
f:\Jaw\bills\1610 senior tax deferral\bill1.docx
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LEGISLATIVE REQUEST REPORT
Expedited Bill 10-16
Taxation
-
Residential Real Property Tax Deferral- Senior Citizens
DESCRIPTION:
Expedited Bill 10-16 would provide for a residential real property tax
deferral for residents at least 65 years old with a gross income of
$80,000.
Some individuals desire relief from the burden of increased property
taxes.
To alleviate the tax burden for certain eligible residents.
Department of Finance
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, 240-777-7815
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Nt
A
F:\LAW\BILLS\161O
Senior
Tax Deferral\LRR.Docx