2016 End of Session Wrap-Up: Tax and Revenue – Property Taxes

This post summarizes the status of tax and revenue bills related to the property tax that MACo took a position on or considered during the 2016 General Assembly Session.

checkLocal Option Personal Property Tax Break: HB 69 would authorize local jurisdictions to grant a personal property tax credit to a new business entity or a business entity with 15 or fewer employees operating within the jurisdiction. MACo supported the legislation as it provides broad local authority to enact tax incentives for economic development and tax relief purposes and does not mandate reductions in local revenue sources.

Final Status: HB 69 passed the General Assembly and is being reviewed for the Governor’s signature. 

MACo testimony on HB 69

checkTargeted Personal Property Tax Exemption – Government-Owned Land: SB 673/HB 1299, as introduced, would exempt from the property tax property located on governmental lands that is used for a public purpose. House and Senate bill sponsors acknowledged that the bill was overly broad as introduced and offered to amend the bill to narrow its scope. MACo supported the bill with amendments to reflect discussions that had taken place between the Maryland Port Administration, Baltimore City and County, and Ports America Chesapeake.

SB 673 was amended by the Senate to provide a personal property tax exemption for property being used for a public purpose under a public-private partnership agreement with a State entity; or cargo handling purposes. HB 1299 was amended by the House to provide an exemption if the personal property is a crane used for cargo handling purposes more accurately reflecting the agreed upon arrangement. MACo supported HB 1299 as amended and urged the committees to amend SB 673 in the same manner.

Final Status: A House and Senate conference committee was appointed to resolve the differences between the two committees on HB 1299. The Senate concurred with the House amendments to limit the bill only to cranes used for cargo handling purposes. SB 673 passed the Senate and had a hearing in the House Ways and Means Committee.  No further action was taken.

MACo testimony on SB 673

checkProperty Assessments: SB 115 as introduced would have authorized the State Department of Assessments and Taxation (SDAT) to use aerial or ground level photography or other similar technologies to perform property assessments. MACo supported the bill as the use of these technologies would create operational efficiencies and enable SDAT to adequately assess properties improving the accuracy and timeliness of assessments.

After concerns were raised by the Senate Budget and Taxation Committee during the bill hearing and SDAT’s budget hearing, the bill was amended by the Senate to forbid SDAT and its local offices from using aerial photography or other similar technologies to perform property assessments. MACo reviewed the heavily altered bill and ultimately opposed SB 115 as amended — stating that the bill was an inappropriate overreaction to mistaken impressions about the bill’s intent. MACo urged the committee to reject the bill to leave the matter open to further, more narrowly crafted, consideration.

Final Status: SB 115 was amended and passed by the Senate to forbid SDAT and its local offices from using aerial photography or other similar technologies to perform property assessments. The House Ways and Means Committee held a hearing on the bill, but no further action was taken.

MACo testimony on SB 115

checkHB 1363 would require the State Department of Assessments and Taxation to provide specific timely information to a homeowner appealing a property assessment. However, if the Department fails to meet the bill’s timetable, the homeowner effectively wins the appeal and earns an assessment freeze.

MACo supported HB 1363 with amendments to remove the assessment freeze language from the bill as its unfairly penalizes counties, who have no role in providing information for a property assessment appeal. Instead MACo suggested a reporting requirement that could be used to take appropriate SDAT action through the budget or subsequent legislation, without eroding local tax bases.

Final Status: HB 1363 passed the House as introduced, but was amended by the Senate. Senate amendments eliminate the assessment freeze at the supervisory level of the appeal and for appeals before the Property Tax Assessment Appeals Board.  The House concurred with the Senate amendments and the bill passed both chambers. The bill is now being reviewed for the Governor’s signature.

MACo testimony on HB 1363

Property Tax Credit: HB 898 authorizes local governments to provide a property tax credit for an individual who is at least 65 years old and has lived in the same home for at least the preceding 40 years or is a retired member of the U.S. Armed Forces who is at least 65 years old. The tax credit may be provided for up to five years and may not exceed 20% of the county or municipal property tax imposed on the property. Local governments have authority to set additional eligibility criteria. MACo did not take a position on this legislation.

Final Status: HB 898 passed the General Assembly and is being reviewed for the Governor’s signature.  

 

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