Bill No.
36-10
Concerning:
Finance - Revenue
Stabilization Fund - Amendments
Revised: June
28, 2010
Draft No.
_4_
Introduced:
May
27,2010
Enacted:
June
29,2010
Executive:
July
7, 2010
Effective:
October 4,
2010
Sunset Date:
_N!.!;o~n!.:=e
_ _ _ _ __
Ch,
~,
Laws of Mont Co.
2010
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN
ACT to:
(1)
(2)
(3)
repeal the limit on the size of the Revenue Stabilization Fund;
modifY the requirement for mandatory County contributions to the Revenue
Stabilization Fund; and
generally amend the law governing the Revenue Stabilization Fund.
By amending
Montgomery County Code
Chapter 20, Finance
Article XII
Sections 20-65, 20-66, 20-68, 20-69, 20-70, 20-71 and 20-72
By repealing
Montgomery County Code
Chapter 20, Finance
Article XII
Section 20-67
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unajfocted by
bill.
The County Council for Montgomery County, Maryland approves the following Act:
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Bill No. 36-10
1
Sec.
1.
Sections 20-65, 20-66, 20-68, 20-69, 20-70, 20-71 and 20-72 are
amended and Section 20-67 is repealed as follows:
20-65.
Definitions.
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3
4
In this Article the following terms have the following meanings, unless the
context clearly indicates a different meaning:
[(a)]
Actual total revenues
means the combined total of income tax, real
property transfer tax, recordation tax, and investment income.1 as
reported in the County's annual financial report.
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Adjusted Governmental Revenues
means tax-supported County
Governmental Funds revenues, plus revenues of the:
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ill
ill
ill
ill
ill
[(b)
County Grants Fund;
County Capital Projects Fund;
tax supported funds of the Montgomery County Public Schools,
not including the County's local contribution;
tax supported funds of Montgomery College, not including the
County's local contribution; and
tax supported funds of the Montgomery County portion of the
Maryland-National Capital Park and Planning Commission.
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Certified revenues
means revenues derived each fiscal year from the
income tax, real property transfer tax, recordation tax, and investment
income of the General Fund as certified by the Director on or before
June 15.]
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[(c)
Debt Service Fund
means the fund used to accumulate funds to pay
general long-term debt principal, interest and related costs.]
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[(d)]
Director
means the Director of the Department of Finance.
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Excess revenue
means the amount. if positive, by which actual total
revenues from the income tax. real property transfer tax. recordation
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28
tax:. and investment income of the General Fund for the fiscal year
exceed the original projections for these amounts.
[(e)]
Fund
means the Revenue Stabilization Fund created under this
Article.
[(f)]
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General Fund
means the general operating fund of the County which
is used to account for all revenues and expenditures, except revenues
and expenditures required to be accounted for in another fund.
[(g)]
Income tax
means the County income tax imposed under state law.
[(h)]
Investment income of the General Fund
means income from the
investment of revenues that is reported in the General Fund.
[(i)]
Original projection
means the projection of total General Fund
revenues for the next fiscal year approved by the County Council in
the "Schedule of Revenue Estimates and Appropriations" resolution
or any similar resolution.
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(0)]
Real property transfer
tax means the tax imposed under Sections 51­
19 et. seq.
[(k)]
Recordation tax
means the tax imposed under Sections 12-101 et.
seq., Tax-Property Article, [Annotated Code of] Maryland Code.
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[(1)]
Revised forecast
means any revised projection of total General Fund
revenues for the next fiscal year prepared by the Department of
Finance.
Total reserve
means the sum of the reserve in the Fund plus the
Unrestricted General Fund Balance.
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Unrestricted General Fund Balance
means the residual portion of the
General Fund fund balance that has not been reserved, restricted, or
encumbered for later years' expenditures.
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BILL
No. 36-10
54
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20-66.
(a)
Revenue Stabilization Fund.
The Director may establish a Revenue Stabilization Fund to support
appropriations which have become unfunded.
(b)
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The Fund is continuing and non-lapsing.
The Fund is in addition to any surplus that is accumulated under
Section 310 of the County Charter.
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ill
20-67.
[(a)
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[Fund sources and maximum size.] Reserved.
The Fund must not exceed 10 percent of the average aggregate annual
revenue derived from the income tax, real property transfer tax,
recordation tax, and investment income of the General Fund in the 3
preceding fiscal years.
(b)
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The Director must compute the maXImum amount of the Fund
annually and report that amount to the County Council not later than
June 15.
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(c)
The Fund is in addition to any surplus that may be accumulated under
Section 310 of the County Charter.]
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20-68.
[(a)
Mandatory contribution to Fund.
Subject to the limit set in Section 20-67(a), the] The mandatory annual
contribution to the Fund must equal the greater of:
ill)
[50 percent of the product of the certified revenues estimated for the
current fiscal year times the difference between:
(l)
the annual percentage increase in the certified revenues
projected for the next fiscal year, and
(2)
the average annual percentage increase in the certified revenues
collected in the 6 fiscal years immediately preceding the next
fiscal year.] 50 percent of [[the)) any excess revenue [[amount
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BILL
No.
36-10
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by which actual total revenues from the income tax, real
property transfer tax, recordation tax, and investment income of
the General Fund for the next fiscal year exceed the original
projections for these
amounts]]~
or
(hl
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an annual amount [[that does not exceed]] e9,llal to the lesser of 0.5
percent of the Adjusted Governmental Revenues [[for the current
year, but which does not result in the sum of the current year-end
projected Unrestricted General Fund Balance and the Fund to
exceed]] or the amount needed to obtain a total reserve of
lQ
percent
of the Adjusted Governmental Revenues.
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(
c)
[(b)
A growth or decline in certified revenues which results from either an
increase or decrease in County tax rates must be:
(1)
(2)
excluded from revenues projected for the next fiscal year, and
phased in in the average annual percentage increase calculation
in the third, fourth, fifth and sixth years.
If actual total revenues from the income tax, real property transfer tax,
recordation tax, and investment income of the General Fund for the
next fiscal year exceed the original projection, then 50 percent of the
excess must be transferred to the Fund if doing so will not result in the
10 percent limit in Section 20-67(a) being exceeded.]
20-69.
Discretionary contributions to Fund.
The County Executive may recommend and the County Council may by
resolution approve additional contributions to the Fund [if doing so will not result
in the 10 percent limit in Section 20-67(a) being exceeded].
20-70.
Transfer of contributions.
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BILL
No. 36-10
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The Director must transfer the mandatory contributions required by Section
20-68 and any discretionary contributions under Section 20-69 from the General
[fund] Fund to the Fund at the end of each fiscal year.
20-71.
Interest.
All interest earned on the Fund must be added to the Fund. [However, the
Director must transfer interest earned on the Fund when the Fund exceeds 50
percent of the maximum Fund size authorized by Section 20-67(a) to the Debt
Service Fund as an offset to the approved issuance of general obligation debt.]
20-72.
Use of Fund.
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[[(a) After holding a public hearing and seeking the recommendation of the
Executive, and if the Council finds that reasonable reductions in
expenditures are not sufficient to offset the shortfall in revenue, the
Council may by resolution approved by the Executive transfer an
amount from the Fund to compensate for no more than half of the
difference between the original projection of total General [fund]
Fund revenues for that fiscal year and a revised forecast of the
General Fund revenues projected for the same fiscal year.
If the
IS
Executive disapproves a resolution within 10 days after it
transmitted and the Council readopts it by a vote
of 6
Councilmembers, or if the Executive does not act within 10 days after
it is transmitted, the resolution takes effect.]]
[[(b) However, a transfer must not be approved unless 2 of the following
conditions are met:
(1)
The Director estimates that total General Fund revenues will
fall more than 2 percent below the original projected revenues.
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BILL
No. 36-10
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(2)
Resident employment in the County has declined for 6
consecutive months compared to the same month in the
prevIous year.
(3)
The [local] most recent regional index of leading economic
indicators.'l published
Qy
the Center for Regional Analysis,
George Mason University, or
~
successor index determined
Qy
the Department of Finance, has declined for 3 consecutive
months.]]
[[(c) The cumulative transfers from the Fund in any single fiscal year must
not exceed half of the balance in the Fund at the start of that fiscal
year.]]
[[(d) The funds transferred may only be used to support appropriations
which have become unfunded.]]
[[(e)]]By an affirmative vote of 6 Councilmembers.'l the Council.'l after
holding a public hearin&, reviewing relevant economic indicators. and
seeking the recommendation of the Executive.'l may transfer
[[amounts]] any amount from the Fund to the
G~neral
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Fund [[without
regard to the limits and conditions in subsections (a)-(c)]] to support
appropriations which have become unfunded.
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BILL
No. 36-10
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Approved:
President, County Council
Approved:
IsiahLeggett,
County
d2d~
ecui:
This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk ofthe Council
g7h.
~
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