Expedited Bill No. 37-14
Concerning: Real Property Transfer Tax – Exemption – Enterprise Zones
Revised: 9-24-14 Draft No. 4
Introduced: July 15, 2014
Enacted: September 30, 2014
Executive: October 6, 2014
Effective: October 6, 2014
Sunset Date: None
Ch. 29 , Laws of Mont. Co. 2014
For Montgomery County, Maryland
AN EXPEDITED ACT to:
(1) exempt from a certain provision of the real property transfer tax certain transfers of rezoned property located in an enterprise zone;
(2) repeal archaic and obsolete language and references, and make conforming and stylistic changes; and
(3) generally amend County law regarding the real property transfer tax.
Montgomery County Code
Chapter 52, Taxation
Article II, Real Property Transfer Tax
Boldface Heading or defined term. Underlining Added to existing law by original bill. [Single boldface
from existing law by original bill. Double
by amendment. [[Double boldface brackets]] Deleted from existing law or the bill by
* * Existing law unaffected by bill.
Boldface Heading or defined term.
Underlining Added to existing law by original bill.
[Single boldface brackets] Deleted from existing law by original bill.
Double underlining Added by amendment.
[[Double boldface brackets]] Deleted from existing law or the bill by amendment.
* * * Existing law unaffected by bill.
Sec 1. Section 52-21 is amended as follows:
52-21. Levied; amount.
There is hereby levied a tax on (1) [all transfers] each transfer in the [county] County of a fee simple interest in real property, except a transfer by [way of] mortgage, deed of trust, or deed of trust for the benefit of creditors, (2) the initial transfer of stock or other evidence of ownership in a cooperative housing corporation or similar entity, and (3) [all transfers] each transfer of a leasehold interest in real property where the lease or instrument by which a leasehold interest is [demised] transferred contains a covenant for perpetual renewal, known as ground rent. The tax [shall] must be computed on the value of the full consideration for [such] each transfer at the following rates:
* * *
(e) On rezoned property, [six (6)] 6 percent of the value of the consideration for any transfer of real property which[, after July 1, 1971,] has been rezoned to a more intensive use at the [instance] request of the transferor, transferee, or any other person who has or had at the time of application for rezoning a financial, contractual or proprietary interest in the property, [excluding] not including the value of [improvements] any improvement constructed after [such] the rezoning. "Rezoned" as used [herein shall mean] in this subsection means the classification, reclassification, or change from one zone to another of any property by local map amendment [by the county council sitting as the district council for that portion of the Maryland-Washington Regional District located within Montgomery County, on the "Zoning Map of the Maryland-Washington Regional District in Montgomery County, Maryland" dated May 31, 1958, and subsequent amendments thereto] under Chapter 59. "Rezoned to a more intensive use" [shall mean] as used in this subsection means a classification, reclassification, or change in zone which permits a greater number of dwelling units per acre in any residential zone, or which permits a greater number of permitted uses regardless of area or allows more floor area in a commercial, [[zone]] commercial/residential, employment, or industrial zone, or is from any residential zone to any commercial, commercial/residential, employment, or industrial zone, or is from any industrial zone to any commercial, commercial/residential, or employment, zone.
"Rezoned to a more intensive use" [shall] does not include:
(1) A zoning from a residential zone to a [[Planned Unit Development Zone]] [under division 59-C-7 granted after January 1, 1980], residential floating zone if the approved [[development]] floating zone plan, including any amendments to the plan, does not increase the total number of permitted dwelling units and does not permit commercial or industrial uses, [provided however, that] but the transfer [shall] must be subject to [additional] any tax otherwise due under this subsection if at any time an amendment to the [[development]] floating zone plan increases the total number of permitted dwelling units or permits commercial or industrial uses;
(2) A zoning from a residential zone to a commercial, commercial/residential, or employment, zone within one [(1)] year after the property was down zoned from a [[commercial]] zone of equal or greater intensity to a residential zone by sectional map amendment; [or]
(3) A rezoning from an industrial zone to a commercial, commercial/residential, or employment, zone which:
(i) Is necessitated by a previously adopted amendment to [the zoning ordinance text,] Chapter 59 that was not [upon application or at the instance of] requested by the transferor, transferee, owner, or former owner of the real property, or by any person who has or has previously had an interest of any kind in the property, including a contractual interest; and
(ii) Allows establishment or continuance of a use or uses which were permitted uses on the property under the industrial zone immediately [prior to] before the text amendment, to which use or uses the property was restricted by bona fide covenants recorded among the land records [prior to] before July 1, 1971, and which covenants are in effect at the time of a transfer; or
(4) a rezoning of any property that is located in an enterprise zone when the property is transferred.
[The tax levied and imposed in this subsection shall not apply to transfers which are made pursuant to a bona fide written contract or agreement of sale entered into prior to July 1, 1971; provided, that the director of finance may require satisfactory proof that the contract or agreement was entered into prior to such date. There shall be deducted from the consideration as defined in section 59-19 the] The taxpayer may deduct from the consideration on which the tax is based any cost [or expense] actually incurred by the transferor for public improvements, such as sewer, water, roads, sidewalks, storm drainage structures, and permanent soil erosion and sediment control measures, [subject to the submission to the director of finance of] if the taxpayer submits satisfactory proof of [such] costs [or expenses] documented by certificates from public agencies where applicable[; provided, that], but the rate of [such] the tax on a single transfer [shall] must not exceed [six (6)] 6 percent of the bona fide market value consideration for the transfer. [Where] If a transfer is subject both to the tax imposed by this subsection and the tax imposed by subsection (d), the tax imposed by this subsection [shall] must be the only tax imposed on the transfer. Any tax collected under this subsection [shall] must be collected only once on the first taxable transaction after each rezoning to a more intensive use, and [all transfers] any transfer that does not [subsequent to] follow a rezoning to a more intensive use [shall] must be [taxable] taxed at the rates applicable under other subsections of this section. The [county executive] Executive may [from time to time] issue [written] regulations under method (3) [of section 2A-15 of this Code, pertaining to] regarding the collection of the tax levied in this subsection.
* * *
Sec. 2. Expedited Effective Date. The Council declares that this legislation is necessary for the immediate protection of the public interest. This Act takes effect on the date when it becomes law.