SB 269
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader
Senate Bill 269 (Senator Ellis)
Budget and Taxation Ways and Means
Property Tax Exemption - Disabled Active Duty Service Members, Disabled
Veterans, and Surviving Spouses - Refund
This bill requires the State, a county, or a municipality to provide a property tax refund to
a disabled active duty service member, disabled veteran, or surviving spouse under
specified circumstances. The State, a county, or a municipality must pay interest on the
refund. The bill takes effect June 1, 2021, and applies retroactively to taxable years
beginning after June 30, 2018.
Fiscal Summary
State Effect: Special fund expenditures increase beginning in FY 2022 to the extent State
property tax refunds are issued. State revenues are not directly affected.
Local Effect: Local government expenditures increase beginning in FY 2022 to the extent
property tax refunds are issued. Local revenues are not affected. The bill imposes a
mandate on a unit of local government.
Small Business Effect: None.
Analysis
Bill Summary: The bill allows disabled active duty service members and disabled
veterans to apply for a refund of State, county, and municipal property taxes paid if the
application is made within three calendar years of the individual becoming eligible for a
property tax exemption for the dwelling house that the individual resides in. In addition,
the bill allows a surviving spouse to apply for a State and municipal property tax refund;
the surviving spouse is already allowed under current law to apply for a county property
tax refund.
Current Law: The real property owned by disabled veterans, as their legal residence, is
exempt from taxation, if specified requirements are met. A disabled veteran is an individual
who is honorably discharged or released under honorable circumstances from active
service in any branch of the U.S. Armed Forces. To qualify for the tax exemption, the
disabled veteran must have a 100% service-connected disability rating. Real property
owned by the surviving spouse of a disabled veteran and the surviving spouse of an
individual who died in the line of duty while in active military, naval, or air service of the
United States is exempt from taxation. In addition, a home owned by the surviving spouse
of a veteran of the U.S. Armed Forces who receives Dependency and Indemnity
Compensation from the U.S. Department of Veterans Affairs is eligible for a property tax
exemption under specified circumstances.
Chapter 520 of 2019 provided a property tax exemption for the dwelling owned by a
disabled active duty service member. A disabled active duty service member must apply
for the property tax exemption by providing to the Supervisor of Assessments a
certification of the service member’s disability from a physician licensed to practice
medicine in the State or from the Veterans’ Administration, on the form provided by the
State Department of Assessments and Taxation. A disabled active duty service member is
defined as an individual in active service of the military, naval, or air service as defined in
38 U.S.C. § 101 who has a service connected physical disability that is reasonably certain
to continue for the life of the service member and was not caused or incurred by misconduct
of the service member.
Local Refund Provisions for Disabled Veterans
The Maryland Association of Counties advises that the following counties have established
refund provisions applicable to disabled veterans, as shown in Exhibit 1.
SB 269/ Page 2
 Exhibit 1
County Refund Provisions for Disabled Veterans
County Refund Provision
Anne Arundel Grants a refund of county property taxes paid by a disabled veteran
or surviving spouse in the taxable years in which an exemption was
authorized but not granted. A refund may not be made for a year or
portion of a year that is more than five years preceding the date of
application for the refund.
Baltimore Provides that a disabled veteran or surviving spouse of a disabled
veteran may be eligible for a refund of taxes paid for up to
three years prior to receiving the exemption.
Calvert Grants a real property tax refund upon the county portion of the real
property tax paid upon the principal residence of a qualifying
disabled veteran through the date that the Veterans Administration
makes the determination of their disability.
Cecil Enacted legislation granting refunds to veterans or surviving
spouses for up to three years prior to receiving the exemption.
Montgomery Grants a refund of county property taxes paid by a disabled veteran
or surviving spouse in the taxable years in which an exemption was
authorized but not granted. A refund may not be made for a year or
portion of a year that is more than five years preceding the date of
application for the refund.
Prince George’s Provides a refund for the period that the eligible taxpayer was
eligible for the benefit (limited to current period plus three years).
Queen Anne’s Grants a refund of county and municipal property taxes paid by a
disabled veteran or surviving spouse in the taxable years in which
an exemption was authorized but not granted. A refund may not be
authorized for any taxes paid more than three years prior to the date
of refund.
Source: Maryland Association of Counties
SB 269/ Page 3
Fiscal Impact of Existing Property Tax Exemptions for Disabled Veterans
For fiscal 2020, 12,386 property owners received a property tax exemption for being a disabled
veteran, a surviving spouse, or a disabled active duty service member, and the assessment for
these properties was approximately $4.1 billion. The associated State revenue loss from these
exemptions totaled approximately $4.6 million, based on a $0.112 State property tax rate. All
State property tax revenues are credited to a special fund, the Annuity Bond Fund, dedicated
exclusively to paying the debt service on State general obligation bonds. Local governments
generally have the authority to set their own property tax rates. Based on the average combined
county-municipal property tax rate, the projected local revenue loss from the current
exemption could total approximately $50 million.
State Fiscal Effect: In some instances, there is a delay in the time a veteran applies to the
federal government for disability benefits and when a State and local property tax
exemption is granted due to the time it takes to process claims at the federal level. As a
result, the individual has to pay State and local property taxes while the application is
processed and approved. The bill allows these individuals to receive a refund for any
property taxes paid for up to three years from when the disability claim was filed.
State special fund expenditures increase beginning in fiscal 2022 to the extent State
property tax refunds are issued. The amount of the expenditure increase depends on the
number of eligible individuals who apply for a refund of State property taxes in any year
and the assessed value of each exempt property.
As a point of reference, a refund issued for State property taxes paid would total
approximately $370, based on the real property assessments of individuals who received a
property tax exemption in fiscal 2020. Therefore, if 50 refunds were issued each year,
expenditures will increase by $18,500 annually beginning in fiscal 2022.
Local Fiscal Effect: County and municipal expenditures increase beginning in fiscal 2022
to the extent property tax refunds are issued. The amount of the expenditure increase
depends on the number of eligible individuals who apply for a refund of county and
municipal property taxes in any year and the assessed value of each exempt property. As
noted in Exhibit 1, several counties already provide property tax refunds to disabled
veterans and their surviving spouses.
As a point of reference, a refund issued for county property taxes paid would be
approximately $3,500, on average, based on the real property assessments of individuals
who received a property tax exemption and county property tax rates for fiscal 2021.
Therefore, if 50 refunds were issued each year, total county expenditures would increase
by $175,000 annually beginning in fiscal 2022.
SB 269/ Page 4
 Additional Information
Prior Introductions: SB 109 of 2020 received a favorable with amendments report from
the Senate Budget and Taxation Committee and passed the Senate. The bill was referred to
the House Ways and Means Committee, but no further action was taken.
Designated Cross File: HB 1311 (Delegate Mangione) - Ways and Means.
Information Source(s): Maryland Association of Counties Maryland Municipal League;
State Department of Assessments and Taxation; Department of Legislative Services
Fiscal Note History: First Reader - January 25, 2021
rh/hlb Third Reader - April 12, 2021
Analysis by: Michael Sanelli Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 269/ Page 5


Statutes affected:
Text - First - Property Tax Exemption - Disabled Active Duty Service Members, Disabled Veterans, and Surviving Spouses - Refund: 7-208 Tax Property
Text - Third - Property Tax Exemption - Disabled Active Duty Service Members, Disabled Veterans, and Surviving Spouses - Refund: 7-208 Tax Property