Contact: Esther Bowring, 240-777-6530
Scott Reilly, 240-777-2500
For Immediate Release: December 10, 2001

Duncan Proposes Countywide Development Impact Tax Bill

County Executive Douglas M. Duncan today sent a proposed development impact tax bill to the County Council that expands the current law by imposing a new tax on those parts of the County not included in the existing impact tax districts and exempts affordable housing and biotechnology development from the tax.

“This bill addresses the most pressing quality of life issue facing the County today – traffic congestion – by targeting the revenue generated by the tax to key transportation projects,” said Duncan. “In order to keep Montgomery County moving, developers must be required to pay their fair share of the costs of development, the costs associated with building more roads, and expanding transit.”

Revenue from the legislation is estimated to be $6 to $8 million when fully implemented. The development impact tax bill will maintain the three existing impact tax districts at current tax rates and establish a fourth district that encompasses the remainder of the County, including municipalities. Revenue from the current districts will continue to be used for presently designated improvements. Funds from the new County-wide district will be earmarked for widened or new roads and capacity-producing intersection improvements; new or expanded park-and-ride lots or transit centers; or new buses (not replacements) for the County’s Ride On fleet.

Excluded from the development impact tax will be Moderately Priced Dwelling Units and similar programs enacted by Gaithersburg or Rockville, Productivity Housing, development where at least 20 percent of the units are earmarked for seniors who are disabled or handicapped or as affordable housing, personal living quarters, accessory apartments, Opportunity Housing Projects, biotech development or manufacturing, and enterprise zones as designated by Maryland.

Main Points

1. Maintain 3 existing Impact Tax Districts at current rates

2. Establish 4th district encompassing remainder of County

(including municipalities) 3. Uses of Revenues:

a. Funds to be used in current districts for presently designated improvements

b. Funds in new County District can be used for:

i. new or widened roads and capacity producing intersection improvements

ii. new or expanded park-and –ride lots or transit centers

iii. new buses for Ride-On fleet, not replacement buses

c. Funds collected in Metro Station Policy Areas must be used in same area or adjacent Planning Policy Area

5. Rates

a. Current district rates remain the same

b. New County District rates:

• SF Residential/deatached $2,100 per dwelling unit

• SF Residential/attached $2,100 per dwelling unit

• MF Residential $1,100 per dwelling unit

• MF Senior Residential $ 325 per dwelling unit

• Office $1.50 / sq.ft. GFA

• Industrial $1.00 / sq.ft. GFA

• Retail $1.50 / sq.ft. GFA

• Places of Worship $0.20 / sq.ft. GFA

• Private schools $0.30 / sq.ft. GFA

• Other non-residential $1.00 / sq.ft. GFA

c. Development in Metro Station Policy Areas pay 50% of calculated tax.

d. Phase in County-wide district rates over 2 ˝ years

i. 25% - July 1, 2002 to June 30, 2003

ii. 50% - July 1, 2003 to June 30, 2004

iii. 75% - July 1, 2004 to December 31, 2004

iv. 100% - on or after January 1, 2005

v. Current district rates remain at 100%

a. MPDUs

b. Affordable housing <60% of median income

c. Senior & disabled housing <60% of median income

d. Productivity Housing

e. Opportunity Housing

f. PLQ (Personal Living Quarters) facilities

g. Accessory apartments

h. Biotechnology development

i. Enterprise Zones

j. Development already having subdivision approval or project plan approval if permit is issued within 2 years