Board is said to have acted needlessly

Tax law has no impact on homeowner group, Curran opinion says

Truth in Taxation Act

Dec. vote to change assessments affected cap on property lien


March 07, 2001|By Laura Vozzella | Laura Vozzella,SUN STAFF

Maryland's attorney general issued an opinion yesterday indicating that the Columbia Association's board of directors needlessly did away with a longstanding protection for homeowners -- a cap on the local equivalent of property taxes.

Attorney General J. Joseph Curran Jr. found that, contrary to what the board was told before it voted in December to change the way it assesses property, the Truth in Taxation law does not apply to the association because it is a homeowners association, not a municipal or county government.

"In our opinion, the 2000 legislation has no impact on the charge made by the Columbia Association," Curran wrote.

The opinion confirmed the conclusion reached earlier by an assistant attorney general and the views of some board members, who also serve as Columbia Council members.

"Attorney General Curran's opinion confirms that there was no basis to change the calculation of the Columbia Association charge," said Ronald W. Wineholt, director of the state Department of Assessments and Taxation.

Attorney David H. Bamberger had advised the board to make the change to comply with the Truth in Taxation law, which took effect Oct. 1. He declined to comment on the attorney general's opinion, because he has not had a chance to study it. The opinion was issued just before the close of the business day.

But Bamberger noted that the opinion is not binding.

"What the attorney general has to say, people of course pay attention to ... but it's not the law," he said.

The Columbia Association charges an annual property assessment to support recreational amenities and other services for the community's 87,000 residents.

Under the Truth in Taxation law, local governments will tax residential and business properties at 100 percent of their assessed value instead of at a percentage of that value.

The measure was intended to simplify confusing assessment notices and attract businesses to Maryland by helping the state fare better in national tax-rate rankings. The law was not intended to affect the amount taxpayers are charged, because it would be coupled with corresponding decreases in tax rates.

But in Columbia, the change has the potential to affect how much people pay because it creates a loophole around the community's limit on assessments.

Columbia assessments are capped, under legally enforceable covenants, at 75 cents per $100 of assessed valuation.

When the board voted 6-4 on Dec. 21 to assess property at 100 percent instead of 50 percent of value, it also cut the lien rate in half, from 73 cents to 36.5 cents per $100 of assessed value.

That means Columbians will pay no more on their next assessment bills. But, some board members warned, it also means the council suddenly has a lot more leeway in setting the lien rate. They said the board is free to raise the rate as high as 75 cents, which would effectively double the amount people pay.

Board members who voted to make the change were Chairman Lanny Morrison of Harper's Choice, Kirk Halpin of Kings Contrivance, Donna Rice of Town Center, Robert Conors of Dorsey's Search, Miles Coffman of Hickory Ridge and Pearl Atkinson Stewart of Owen Brown.

Those against were Cecilia Januszkiewicz of Long Reach, Barbara Russell of Oakland Mills, Vincent Marando of Wilde Lake and Adam Rich of River Hill.

The attorney general's opinion does not direct the board to rescind its December vote or take any other action.

The opinion said, "Although we disagree with the conclusion apparently reached by the Association that the Truth in Taxation Act requires it to use the 100 percent ratio, we have no reason to question that this action was a good faith effort to give effect to the perceived import of recent legislation. We also note that this action did not have the effect of increasing any individual charge."

The attorney general's office formulated the opinion at the request of Del. Shane Pendergrass, a Democrat who lives in Columbia. Russell had asked Pendergrass to seek the opinion on her behalf.

In June, an assistant attorney general issued a "letter of advice" indicating that the law did not apply to the homeowners association because it is not a municipal or county government.

Morrison declined to comment, saying he had not seen the opinion.

Russell had not read the opinion, but she said that if it agrees with the advice of the June letter, she would not be surprised. She said she was eager to bring the matter up at tomorrow's council meeting, which Bamberger was scheduled to attend.

"I think that the council has to give this very serious consideration, and I'll be anxious to hear the reaction of the counsel," she said.

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