2014 End of Session Wrap Up: Tax and Revenue – Property Tax Related Legislation

This post summarizes the status of tax and revenue bills related to the property tax that MACo either considered or took a position on.

Homestead Tax Credit – Settlor, Grantor, or Beneficiary of a Trust: HB 227 / SB 572 expands eligibility for receiving the Homestead Property Tax Credit to include a settlor, grantor, or beneficiary of a trust if the person serving in this capacity does not pay rent or other remuneration to reside in the property and legal title to the dwelling is held in the name of the trust or in the names of the trustees. As introduced, the bill also provided for a seven-year refund period. MACo supported the bill with amendments to remove this unusual refund period language.  Under current law, property tax refunds may be sought for no more than three years. MACo believes this is a reasonable timeframe and a justification did not exist for an expansion. Working with the State Department of Assessments and Taxation, the bill sponsor, and the Committee, MACo was successful in amending the bill to remove its retroactive application.

Final Status: HB 227 / SB 572 passed the General Assembly and is now awaiting the Governor’s signature.

Property Tax ExemptionsHB 245 would have authorized a local government to provide a property tax exemption for real property owned by an affordable housing land trust, but not yet subject to an affordable housing land trust agreement. MACo supported this legislation stating it would give counties flexibility to establish a local property tax exemption to further their goals of providing sustainable, affordable housing.

Final Status: HB 245 had a hearing in the House Ways and Means Committee with no further action. However, a local bill just affecting Frederick County did pass the General Assembly, (HB 321 / SB 616).

HB 863 authorizes a local government to provide a property tax exemption for community managed open space that is subject to a cooperative agreement with the Maryland Environmental Trust. As amended, the bill requires a community open space management entity to enter into an agreement with the appropriate local governing body that is subject to periodic review before a property tax exemption is granted. MACo supports this approach as it would allow the local government to affirmatively approve the property as newly tax exempt instead of providing for a blanket exemption. The periodic review would ensure that this property continues to be used most appropriately as community open space.

Final Status: HB 863 passed the General Assembly and is awaiting the Governor’s signature. 

HB 898 / SB 872 would have expanded the personal property tax exemption for specified manufacturing personal property by including the handling or movement of a finished product at a manufacturing site after the last step of production through the next immediate step before storage and shipping.  MACo took an opposing position on this legislation.

Final Status:  HB 898 and SB 872 were withdrawn by their House and Senate sponsors.

HB 1252 would have significantly expand an existing property tax exemption for disabled veterans and surviving spouses. Under current law, for a property tax exemption to be granted to a disabled veteran or surviving spouse, the disabled veteran must have a 100% service connected disability. HB 1252 expands this criteria to apply to disabled veterans with a service connected disability of 50% or greater. MACo opposed this bill as it would negatively affect local government revenues.

Final Status: HB 1252 was withdrawn by the sponsor.

Property Tax Credit for Commercial Structures: SB 605 / HB 691 provides for a property tax credit to bring commercial structures into compliance with building and safety codes. As introduced, the bill was very prescriptive  in terms of the criteria for the credit. MACo supported the bill with amendments to give flexibility to determine the amount of the credit and the duration. The bill as amended specifies that the amount of the credit may be up to 50% of the amount of qualifying investment and that the credit may be granted for up to a period of 10 years.

Final Status: SB 605 passed the General Assembly and is awaiting the Governor’s signature.  Its cross file, HB 691 was not voted by the House Ways and Means Committee.

Notice of Tax Bill Address Change: SB 179 would have established a local government-based process to allow an owner of real property to request property tax bills be sent to an address other than the actual address of the real property. The bill would also allow anyone with an interest in the real property to request a copy of the tax bill, and prohibit a property from being sold at tax sale if the taxing authority was not compliant with the notification provisions. MACo opposed this legislation as it would present significant fiscal and administrative challenges for local governments.

Final Status: SB 179 was withdrawn by the sponsor.