OOGlenn Orlin, Deputy Staff Director
Faden, Senior Legislative Attorney
Expedited Bill 14-10, Recordation Tax - Allocation of Revenue
Management and Fiscal Policy Committee
Expedited Bill 14-10, Recordation Tax - Allocation of Revenue, sponsored by the Council
President at the request ofthe County Executive, was introduced on March 23,2010. A public hearing
was held on May 4 (see testimony, ©15-17) and a Management and Fiscal Policy Committee worksession
was held on May 6.
Recordation tax background As Councilmembers will recall, the County recordation tax,
levied under state law and shown in County Code §52-16B, since 2008 has 3 levels or tiers which
detennine how the revenue from this tax is allocated:
Use of funds
General Fund (unrestricted)
MCPS capital, College educational technology
50% County government capital improvements
50% new funding for rental assistance programs
Summary Bill 14-10 would suspend for the next 2 fiscal years the current requirement that
certain revenue from the recordation tax (Tier 3)
allocated to the cost of County Government capital
projects and rental assistance programs for low and moderate income households.
On April 27, the Executive proposed a further amendment (see ©7-8) that would also suspend,
for the next 3 fiscal years, the requirement that another portion of the recordation tax (Tier 2)
to capital improvements to County schools and educational technology for Montgomery College.
Fiscal impact Total reallocations of $13.22 million. See fiscal impact statement on ©9-10 and
OMB Director's testimony on ©15-16. Economic impact: none assumed (effect of lowering rental
assistance funding not discussed).
Options Other options before the Council for allocation of recordation tax revenue include:
• suspend the statutory revenue allocations in Tiers 2-3 only for the next fiscal year, FYII
(this was Montgomery College's recommendation - see ©11-14);
• repeal the statutory revenue allocations in Tiers 2-3 so that all recordation tax revenue
goes to the General Fund and is available for any appropriation;
• broaden the Tier 2-3 allocations to include the entire Capital Improvements Program.