HB 459
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 459 (Delegate Mangione)
Ways and Means
Disabled Active Duty Service Members, Disabled Veterans, and Surviving
Spouses - Exemption From Property Tax and Other Charges and Refunds
This bill exempts a dwelling house owned by a disabled active duty service member,
disabled veteran, or surviving spouse from specified governmental charges imposed by the
State. The 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, 2016.
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 five calendar years of the individual becoming eligible for a
property tax exemption for the dwelling house that the individual resides in. The bill also
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. In addition, the bill exempts a disabled active duty service member, disabled
veteran, or surviving spouse from paying any governmental charges or fees that are
assessed on their dwelling house.
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
specified 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.
HB 459/ 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
HB 459/ Page 3
In Prince George’s County, the number of property tax refund applications and refund
amounts for disabled veterans over the preceding four years have ranged from
239 applications in fiscal 2018 to 461 applications in fiscal 2020, with refund amounts
ranging from almost $700,000 to $1.2 million. Exhibit 2 shows the number of refund
applications and refund amounts for each year.
Exhibit 2
Property Tax Refunds for Disabled Veterans in Prince George’s County
Fiscal 2018-2021
Number of Property Tax
Fiscal Year Applications Refund Amount
2018 239 $0.7 million
2019 375 $1.1 million
2020 461 $1.2 million
2021 (to date) 258 $0.7 million
Source: Prince George’s County
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 five years from when the disability claim was filed.
HB 459/ Page 4
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.
Additional Information
Prior Introductions: A similar bill was introduced as HB 1109 in the 2020 session. The
bill received a hearing in the House Ways and Means Committee, but no further action was
taken.
Designated Cross File: None.
Information Source(s): Howard and Prince George’s counties; Maryland Municipal
League; Department of Legislative Services
Fiscal Note History: First Reader - January 31, 2021
rh/hlb
Analysis by: Michael Sanelli Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 459/ Page 5


Statutes affected:
Text - First - Disabled Active Duty Service Members, Disabled Veterans, and Surviving Spouses - Exemption From Property Tax and Other Charges and Refunds: 1-306 Tax Property, 7-208 Tax Property, 7-208 Tax Property