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Legislative Information

Current issues and pending real estate legislation

March 2017

Battling BATs: Septic Bills Halted in Howard, Annapolis

Based on feedback from REALTORS®, two bills to require installation of Best Available Technology (BAT) septic systems were defeated, saving area homeowners as much as $10,000.

In March, the Howard County Council considered restoring major subdivision rights to landowners who were downzoned when the County adopted growth tiers in 2013. The only condition was that those subdivisions must use BAT septic systems. HCAR provided comments and testimony before the Council which stated our total opposition to the imposition of BAT systems, even to re-establish property rights. As a result, the measure was withdrawn.

REALTOR® letters submitted through MAR’s Call for Action were a deciding factor in turning back a proposal to again mandate BAT system use in virtually every part of the state. Citing a lack of scientific support for the requirement and the significant costs of these systems, the Maryland Senate amended SB 266 to limit BAT usage to only critical areas, which is consistent with current practice. The House did not consider the bill before adjournment, leaving existing septic system guidelines in place for at least another year.

State Legislation Round-Up

Septic systems were not the only topic of interest in the 2017 General Assembly session. REALTORS® can claim the following policy victories as well:

Open Houses: HB 760, which allows REALTORS® to discuss surrounding properties with open house attendees if the seller consents, passed both chambers unanimously.

Mortgage Forgiveness: SB 367 provides state tax relief for forgiven mortgage debt of up to $100,000 for individual tax returns or $200,000 for joint returns. It awaits the Governor’s signature.

Homebuyer Tax Credit Study: HB 230, establishing a state income tax credit for contributions to a homebuyer savings account, did not pass this session. However, the proposal was very favorably received by the General Assembly and the Department of Taxation, and is expected to be studied before the beginning of the next General Assembly session.

In addition, MAR opposed the following proposals, which were harmful to real estate:

Jury Trials in Eviction Proceedings: As originally drafted, SB 501 would have allowed tenants being evicted to choose a trial by jury. This bill was amended to allow jury trials only for amounts over $15,000, before being killed in the House.

Transfer Tax Increase: SB 812 would have increased the real estate transfer tax by up to $250 for residential and commercial transactions. The transfer tax portion was stripped from the bill in the Senate before being left in the House.

Carried Interest: HB 915 would have imposed an additional 19% tax on revenues currently excluded under the carried interest exemption. It was estimated that businesses operating as pass-through entities in Maryland would have paid an additional $60-$70 million in taxes annually. It did not receive a hearing in the House.

Budget Bytes: Howard Outlines Spending Priorities for FY18

The Howard County Council budget process for Fiscal Year 2018 is now underway – and HCAR is working for you every step of the way! County Executive Alan Kittleman has released his Capital Budget proposal, which outlines new construction and public works projects. The largest segment is dedicated to school system expansion, while also including funding to prevent flooding in Ellicott City. Highlights of the proposal are posted on the County’s website.

Over the coming weeks, Council Members will hold numerous work sessions and public hearings on both the operating and capital budgets. The full schedule of those meetings can be found here. Of particular importance to homeowners and REALTORS® is the Constant Yield Hearing on May 1. At this hearing, the Council will consider whether to set the property tax rate at an amount that would provide more property tax revenue than the current year. If you would like to speak at this or any other budget hearing, sign up on the County website.

Finally, the Spending Affordability Advisory Committee released their report on methods Howard County may employ to meet future capital construction needs. One of the suggestions was to seek an increase in the local transfer tax to benefit school construction. HCAR sent a letter to Executive Kittleman expressing our opposition to any change in the transfer tax rate, which must be granted by the General Assembly. We will continue to work with members of the Council, the County Delegation and Executive Kittleman on this issue.