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Dec 15 08 11:34a 900-000-0000 pel f APARTMENT AND OFFICE BUILDING ASSOCIATION OF AOBA METROPOLITAN WASHINGTON APARTMENT snd OFFICE BULOING ASSOCIATION BILL NO: MC 906-09 DELEGATION: — Montgomery County POSITION: OPPOSE TESTIMONY PRESENTED By LESA NOBLITT HOOVER, Esq. On behalf of APARTMENT and OFFICE BUILDING ASSOCIATION of METROPOLITAN WASHINGTON December 12, 2008 On behalf of the Apartment and Office Building Association of Metropolitan Washington (AOBA), | would like to express the membership's opposition to this bill. AOBA is a non-profit trade association dedicated to the interest of the apartment and office building industries and all support services that go into making these businesses run, AOBA is the local Washington area chapter of Building Owners and Managers ‘Association (BOMA) and the National Apartment Association (NAA). Together these associations represent the nation's largest participants in the multi-family housing industry. The membership works hard to protect and enhance the industry's ability to provide the nation with affordable and safe housing. AOBA members own and manage over 95,000 apartments and 25 million square feet of office space in Maryland of which 30,000 apartments and 18 million square feet of office space are located in Montgomery County. MC 906-08, if enacted, would authorize the County to create specific classes of property subject to real and personal property taxation. This bill enables the County to set a tax rate that varies among each designated class of property. Under current law, Maryland Tax-Property Code Section 8-101 divides property into real property and personal property classes, and then taxes each class at a uniformed rate. This bill, in essence, grants the County an unfettered ability to do the following: 1) Select specific classes of property to be subject to a property tax, and 2) Set the rate of taxation for those classes. The inherent problem created by this bill is the apparent lack of guidance and/or restrictions on the County's ability to shift tax burdens in an unjust and discriminatory manner. MA. 1050 17th Street, NW, Washington, DC 20036 merch Phone: 202-296-3390 * Fax: 202-296-3399 * Email:, AANGRA URL: hutp:// Dec 15 08 11:34a 900-000-0000 P MC 908-09 would result in a decrease in the tax rate on residential property, while increasing the rate on commercial property. This potential tax discrimination is unwarranted and inequitable. Currently, the business community already bears a greater tax burden as a result of the real property homestead tax credit for residences. The business personal property tax rate is capped at 2.6 times the real property tax rate, The County has exceeded this rate four times since enacted in 1992. This cap was put in place by the Maryland General Assembly in order to limit the amount of tax increases the counties could shift to the business community. This bill would invalidate the cap, enable the County to impose even higher taxes on businesses, and serve as an untimely financial hardship for businesses during this time of economic difficulty. Therefore, AOBA opposes any tax or taxing mechanism that is not broad based and fairly apportioned. AOBA strongly urges an UNFAVORABLE vote on MC 906-09.