GO Item 3
November 19, 2012
Worksession 2
MEMORANDUM
TO:
Government Operations and Fiscal Policy Committee
FROM:
::f:!.
Michael Faden, Senior Legislative Attorney
Worksession 2:
Bill 23-11, Development Districts, Special Taxing Districts­
Duplication of Funding
SUBJECT:
Bill 23-11, Development Districts, Special Taxing Districts Duplication of Funding,
sponsored by Councilmember EIrich, then-Council President Ervin, and Councilmembers
Berliner and Navarro, was introduced on June 21,2011. A public hearing was held on July 12,
2011 (see testimony, ©4-9). The first Government Operations and Fiscal Policy (GO)
Committee worksession was held on July 18,2011. Another Committee worksession scheduled
for April 19,2012, was deferred.
As introduced, Bill 23-11 would prohibit any development district from financing any
infrastructure improvement that is or may be financed or credited by any other government
agency, and similarly prohibit the White Flint Special Taxing District from imposing a tax to pay
for any infrastructure improvement that is or may be financed or credited by any other
government agency.
This Bill results from concerns expressed by Councilmembers about potential double­
funding of infrastructure items by development districts or special taxing districts and other
government agencies at the March 28, 2011, joint worksession by the GO Committee and the
Transportation, Infrastructure, Energy, and Environment (T&E) Committee, held to review the
Inspector General's report regarding the West Germantown development district's funding of
certain water and sewer items for which the Washington Suburban Sanitary Commission had
also issued Systems Development Charge credits.
Issues/Committee recommendations
1) Should the law restrict multiple payments for infrastructure items?
At the July 12 public hearing, all speakers except the Maryland-National Capital Building
Industry Association (BIA) supported the intent of this Bill, although several proposed
amendments to avoid restricting funding for infrastructure elements of the White Flint sector
plan (see next issue). The BIA (see testimony, ©9) opposed the Bill entirely because, in their
view, it is "a Solution in search of a Problem". Essentially, the BIA saw nothing wrong with the
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funding of certain water and sewer projects in the West Germantown Development District - the
issue which led the sponsors to propose this Bill. In fact, the BIA concluded that this Bill, if
enacted, would "place a severe penalty on use of development districts." After the hearing the
County Executive submitted a memo (see
©
12-13) requesting changes in the Bill as introduced.
Regardless of whether the water and sewer projects in the West Germantown
Development District were funded consistent with law or with the intent of the Councilmembers
who drafted County Code Chapter 14 (the development district enabling law), Council staff
concurs with the Bill's sponsors that a development district or special taxing district should not
spend scarce funds on infrastructure items for which a developer can be reimbursed or credited
by another government agency. In our view as drafters of Chapter 14, contrary to the BIA's
conclusions, a development district was never intended to pay for creditable items, and we were
quite surprised that one district had done so. As the West Germantown chronology indicated, the
result of this kind of "duplicate" funding, without further controls or oversight, is likely to be that
the ultimate taxpayers - the property owners in the development district or special taxing district
- effectively may not benefit from these credits or reimbursements.
Committee recommendation (July 18 worksession):
in principle, preclude
development districts or special taxing districts from funding infrastructure items that another
government agency has funded or would fund.
2) What exceptions to the "no duplicate funding" rule should be allowed? How
should those exceptions be triggered?
At its July 18 worksession,
the Committee directed Council staff to work with
Executive staff and other stakeholders to draft narrower language
that would achieve the
purposes of this Bill and resolve the scope issues noted by various parties. The staff redraft,
described below, attempts to do so.
Escape clause
The County Planning Board, representatives of the White Flint
Partnership, and the Bethesda-Chevy Chase Chamber of Commerce (see testimony, ©4-8) all
urged that some exception or "escape clause" be inserted into at least the White Flint special
taxing district part of this Bill (as introduced, ©2, lines 14-17) in order to preclude any restriction
on the special taxing district's authority to contribute to infrastructure items, such as state roads
or transit projects, that another government agency may also fund.
Council staff concurs that the Bill was not intended to preclude special taxing district
funding of improvements to state roads, such as Rockville Pike and Old Georgetown Road. In
fact, the implementation resolution for the White Flint special taxing district (Resolution 16­
1570), which the Council adopted on November 30, 2010, expressly commits the special taxing
district to fund significant improvements to both roads. Nor, as far as staff understands, was this
Bill intended to preclude any special taxing district in the future from funding a bus rapid transit
system that the state and federal governments would also contribute to.
Council staff redraft
To confirm this intent and harmonize this Bill with the
public/private approach taken in the White Flint special taxing district,
Council staff
2
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recommends, as part of a more comprehensive staff redraft of this Bill, shown on ©14-16,
that language be inserted in the Bill authorizing the Council, in selected cases, to allow a
development district or special taxing district to finance an infrastructure improvement that
another government agency also finances or credits. Both the Planning Board (see ©5) and the
White Flint Partnership (see ©7) drafted amendments to do this. In our view, both drafts are a
bit too specific and fail to anticipate the possible range of issues that could arise. Instead,
Council staff recommends a broader "escape clause", shoVv'll on the Council staff redraft on
©15, lines 6-7 and ©16, line 29, inserting at the beginning of each sentence: Except as expressly
provided in a Council resolution ..
This simpler proviso would let the Council, in the future, tailor the funding structure of
each development district or special taxing district to its specific facts and circumstances without
weakening the general "no-duplication" rule that is the essential purpose of this Bill. With
respect to the White Flint special taxing district, this amendment would not require the Council
to reopen the already-adopted implementation resolution because, as already mentioned, even
assuming that a later Bill could affect that pre-existing funding structure, the implementation
resolution expressly authorized and committed the district, irrespective of any other funding, to
pay for improvements to the two state roads, Rockville Pike and Old Georgetown Road.
Other clarifications The Council staff redraft on ©14-16 also reflects amendments
offered by Executive branch staff and land use attorneys representing the White Flint Partnership
and other developers. Those amendments would narrow the Bill to apply only to payments or
credits
actually made,
rather than the broader original formulation which included payments or
credits for which the district
would have been eligible
(see ©15, lines 9-13, and ©16, lines 32­
36). Along with that clarification, the Bill would expressly preclude the County from allowing a
credit toward the development impact tax or any other applicable tax, fee, or charge for that part
of any infrastructure improvement financed by a development district or the White Flint special
taxing district (see ©15, lines 17-20 and 23-26). This provision in our view more clearly
achieves the original purpose of this Bill.
This redraft was circulated to Executive staff and other stakeholders before the deferred
April 19 worksession. Council staff recommendation: enact Bill 23-11 as redrafted on ©14­
16.
This packet contains:
Circle #
1
Bill 23-11 as introduced
Legislative Request Report
3
4
Planning Board testimony
6
White Flint Partnership testimony
8
Bethesda-Chevy Chase Chamber of Commerce testimony
Maryland-National Capital Building Industry Ass'n testimony
9
Fiscal impact statement
10
12
Memo from County Executive
14
Council staff redraft
F:\LAW\BILLSII123 DD, STD DuplicationlGO WKS 2 Resked, 11-19-12.Doc
3
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Bill No.
23-11
Concerning: Development
Districts,
Special Taxing Districts - Duplication
of Funding
Revised: 6-16-11
Draft No. 1
Introduced:
June 21, 2011
Expires:
December21,2012
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _---,--_ _ _ _ _ _ __
Sunset Date: --'-!.No=n..:.::e'------::--_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: COllilcilmember Eirich, COllilcil President Ervin, and COllilcilmembers Berliner and Navarro
AN
ACT to:
(1)
(2)
(3)
prohibit any development district from financing any infrastructure improvement
financed or credited by any other government agency;
prohibit the White Flint Special Taxing District from imposing a tax to pay for any
infrastructure improvement financed or credited by any other government agency;
and
generally amend COllilty law regarding the financing of infrastructure
improvements.
By amending
Montgomery County Code
Chapter 14, Development Districts
Section 14-9
Chapter 68C, White Flint Special Taxing District
Section 68C-4
Boldface
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 unaffected by bill.
Underlining
[Single boldface brackets]
Oo.!J.ble underlining
[[Double boldface brackets]]
* * *
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 23-11
1
Sections 14-9 and 68C-4 are amended as follows:
14-9. Second Council Resolution.
2
3
*
(h)
*
*
4
5
An infrastructure improvement financed by a development district may
include any infrastructure required by the Planning Board as a condition
of project, preliminary, or site plan approval. A development district
must not finance any infrastructure improvement that has been or is
likely to be financed
Qy
any other government agency, or for which any
government agency may issue any credit toward the payment of any tax,
fee, or charge.
6
7
8
9
10
11
12
*
68C-4.
*
*
*
*
Transportation Infrastructure Improvement Resolution.
13
14
15
*
A tax imposed under Section 68C-3 must not
~
for any infrastructure
improvement that has been or is likely to be financed
Qy
any other
government agency, or for which any government agency may issue
any credit toward the payment of any tax, fee, or charge.
Approved:
16
17
18
19
Valerie Ervin, President, County Council
Date
20
21
Approved:
22
Isiah Leggett, County Executive
Date
23
This is a correct copy ofCouncil action.
24
Linda M. Lauer, Clerk ofthe Council
Date
f:\law\bills\1123 dd, std • duplication\bill 1.doc
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LEGISLATIVE REQUEST REPORT
Bill 23-11
Development Districts, Special Taxing Districts ­
Duplication ofFunding
DESCRIPTION:
Prohibits any development district from financing any infrastructure
improvement that is or may be financed or credited by any other
government agency, and similarly prohibits the White Flint Special
Taxing District from imposing a tax to pay for any infrastructure
improvement that is or may be financed or credited by any other
government agency.
Councilmembers expressed concerns about potential double-funding
of infrastructure items by development districts or special taxing
districts and other government agencies.
To preclude double funding of infrastructure items by government
agencies.
Department of Finance
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905
Applies only to County government funding mechanisms.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
Not applicable.
f:\law\bills\1123 dd, std dupiication\iegislative request report.doc
(J)
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\
MONTGOMERY COUNTY PLANNING BOARD
THE MARYLAND-NATIONAL CAPITAL PARK AND PLANN[NG COMMISSION
July 11,2011
The Honorable Valerie Ervin, President
Montgomery County Council
100 Maryland Avenue
Rockville, Maryland 20850
Dear Council President Ervin:
On behalf of the Planning Board, I would like to express my concerns regarding the potential effect of
Bill 23-11 on the implementation ofthe White Flint Sector Plan. While the Planning Board supports
the goal of eliminating double payment and double crediting in infrastructure finance districts, the
Planning Board believes that the broad sweep of this bill is unnecessary and that the portion of the bill
which amends Chapter
68C
could create uncertainty for both the private sector and the public sector
with respect to financing the improvements related to the White Flint Special Taxing District.
First, we are concerned that the bill prohibits taxing district funds from being used to pay for any
infrastructure improvement that "is likely to be financed by any other government agency," though the
bill does not establish standards and criteria that describe how such improvements would be
identified.
Second, we are concerned that the bill could be read to prohibit taxing district funds from being used
to pay for infrastructure that is to be partly paid for or financed by the public sector. Implementation
of the White Flint Sector Plan will necessarily involve multiple public sector sources of funds and
financing; any language that creates uncertainty regarding the legality ofjoint participation
unnecessarily puts at risk the future implementation of the White Flint Sector Plan.
Third, we are concerned that the bill could be read to prohibit taxing district funds from being used to
pay for any transportation improvement that could generate impact tax credits. This could include not
only improvements inside the taxing district that would be creditable to an applicant who is not within
the district, but also improvements outside the taxing district that could be paid for using district
funds.
The Planning Board urges you to consider these concerns as you continue considering amendments to
Chapter
68C.
We believe that the approach we are suggesting on the following page addresses the
issue of double payment and double crediting without creating any uncertainty that could affect
successful implementation of the White Flint Sector Plan.
Attachment
8787 Georgia Avenue, Silver Spring, Maryland 20910
Chairman's Office: 301.495.4605
Fax: 301.495.1320
www.MCParkandPlanning.org E-Mail: mcp-chairman@mncppc.org
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To:
The Honorable Valerie Ervin, President, Montgomery County Council
From: Fran90ise M. Carrier, Chair Montgomery County Planning Board
July 11,
2011
68C-4. Transportation Infrastructure Improvement Resolution.
***
(f)
[[A tax imposed under Section 68C-3 must not lli!Y for any infrastructure improvement that has
been or
lli
likely to be financed
Qy
any other government agency, or for which any government agency
may issue any credit toward the payment of any tax, fee, or charge.]]
A tax imposed under Section 68C-3 must not pay for that portion of the cost of any infrastructure
iglproyement that has been paid for by any government agency. except where the Council has
established a repayment plan under this Section.
(g) Unless otherwise specified in a resolution under this Section. a tax imposed under Section 68C-3
must not pay for any infrastructure improvement which would be eligible for any credit against the
impact tax for transportation improvements imposed under Section 52-49.
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Testimony Before the Montgomery County Council on Bi1123-11, Development
Districts, Special Taxing Districts Duplication of Funding
July 12, 2011 Public hearing
By David L. Winstead, Esq., Ballard Spahr LLP
on behalf of the White Flint Partnership
On behalf of the White Flint Partnership, we appreciate the opportunity to provide
comments and convey our concerns over the current text of Bill 23-11, Development
Districts, Special Taxing Districts - - Duplication of Funding. The intent of the Sponsors
of Bill 23-11 is to prevent the duplication of funding which arose over the West
Germantown development district's funding of certain water and sewer items for which
the Washington Suburban Sanitary Commission had also issued Systems Development
Charge credits. This Bill will do just that, but in the process, the overly-broad language
will also prevent primary funding for a number of infrastructure projects.
Bill 23
-11,
as introduced, will have the unintended consequence of undermining the
pUblic/private partnership approach to infrastructure funding embodied in the Approved
and Adopted White Flint Sector Plan. As part of the White Flint Sector Plan,
Montgomery County, White Flint property owners, and the Special Development District
committed to provide over $600 million of infrastructure funding. These commitments
include $280 million from the private sector developers, $152 million from Montgomery
County, and $169 million raised through the established development district.
HB 23-11 raises concerns in several areas with respect to the implementation of this
public-private partnership. Paramount among these is the inclusion of the wording
"or is
likely to be jinancetf'
in Section 68C-4
(t).
This provision would preclude the White
Flint Development District from allocating funding into the planned improvements for
the White Flint section of Md. 355, because at some unspecified point, another source of
government funding commitment
may
be obtained. Clearly, this was not the intent;
therefore, we would proposed deleting this wording, and have provided amendments to
that effect.
In addition, there is a new vision for a County-wide Rapid Transit System, which has
gained a lot of support over the past year; a recent Parsons' study highlights the potential
for over 30,000 daily riders in the White Flint section of such a proposed transit system.
The funding for such a system has not yet been established, and the Council should insure
that Bill 23-11 does not limit the options in this regard.
In order to clearly articulate the Council's intent that developers not receive credits from
two different agencies for the same infrastructure project, the White Flint Partnership
proposes clarifYing language to Bill 23-11. The proposed· language will address the·
narrow focus of the bill, while allowing public/private partnerships and the other
infrastructure financing mechanisms that currently exist.
DMEAST #13856568 v1
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To this end, we would ask that the Council amend Bill 23-11 in the following manner:
On Page 2 - 68C-4, in existing Paragraph
(f)
delete
"or is
likely
to
be"
Add (2) " In the event that such an infrastructure improvement is eligible to be
financed, in whole or in part, by a government entity, then any financing in excess
of the remaining cost to complete, shall not be used for that improvement."
Add (3) " In the event that credits are available from a government agency to
support the cost of an infrastructure improvement, no property owner located
within the special tax district may apply or be given such credit, if any funds
collected under Section 68C-3 are used for such improvement,"
Lastly, in Preamble (2), we propose deleting the reference to " White Flint" so that this
Code section will not have to be amended when other Special Taxing Districts are being
established.
We thank you for your consideration of the above amendments to Bill 23-11. The White
Flint Partnership appreciates your continued support for the vision established by the
White Flint Sector Plan and its Special Taxing District.
We look forward to participating in the Council's work session on the BilL
DMEAST #13856568 v1
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BETHESDA-CHEVY CHASE
CHAMBER OF
COMMERCE
7910 Woodmont Avenue, Suite 1204
Bethesda,
MD
20814
T:
(3D1) 65.2-4900
F: (301) 657-1973
staff@bccchamber.org
www.bccchamber.org
July 12,2011
The Honorable Valerie Ervin, President
and Members of the County Council
Montgomery County Council
100 Maryland A venue, Sixth Floor
Rockville, Maryland 20850
Re:
County Council Bill No. 23-11 - Development Districts, Special Taxing Districts-Duplication of Funding
Dear Council President Ervin and Members of the County Council:
On behalf of more than 600 members of The Greater Bethesda Chevy-Chase Chamber of Commerce (the "B-CC
Chamber"), we are writing in support of County Council Bill No. 23-11 Development Districts, Special Taxing
Districts-Duplication of Funding (the "Proposed Bill"), provided that the Proposed Bill is revised to address the concerns
raised by the White Flint Partnership in its testimony on the Proposed Bill to the Montgomery County Council (the
"County Council") and incorporates the changes proposed by the White Flint Partnership.
Implementation of the vision contained in the White Flint Sector Plan and, in particular, development of a stable
infrastructure funding mechanism(s) has been a central piece ofthe B-CC Chamber's Advocacy Agenda for the past
several years. This includes support for the major landowners who comprise the White Flint Partnership and who are
instrumental to the implementation of the White Flint Sector Plan's vision for the area.
The B-CC Chamber's primary concern is with regard to Section 68C-4(f), which provides that a tax imposed in a
development district must not pay for any infrastructure that "is likely to be financed" by any other government agency.
This provision is problematic because
it
would preclude any development district (specifically, the White Flint
Development District) from allocating any funding to a given improvement if at some point in the uncertain future another
source of government funding
may
be obtained. In theory, this would preclude the development district funding of the
White Flint section of Maryland Route 355 (Rockville Pike).
The inclusion of this language works against the purpose of the White Flint Development District in the first place, which
is to provide greater certainty and predictability to the provision of needed infrastructure and public amenity
improvements in the area. The White Flint Partnership's proposed language would eliminate the "is likely to be financed"
phraseology and inherent uncertainty in such language, and instead would provide that certain safeguards be included
whereby Development District funds and alternative sources of funding could not be utilized on the same improvement
except when a gap exists between Development District fund expenditure and total cost of completion of the
improvement.
For these reasons, we urge the County Council to approve the Proposed Bill with the revisions proposed by the White
Flint Partnership, and we thank you for your consideration of these comments.
Sincerely,
Leslie Ford Weber, Chairman
(Suburban Hospital)
Heather Dlhopolsky, VP, Economic Development
(Linowes and Blocher LLP)
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MARVLANO-NATIONAL CAPITAL
BUILDING INOUS'TRY ASSOCIATlON
Testimony for Bill Number 23-11 Development Districts, Special taxing District - Duplication of Funding
From: S. Robert Kaufman, IVINCBIA
July 12, 2011
The MNCBIA opposes the above bill in its entirety and urges your rejection of the proposed bill. The bill
attempts to correct for a problem that does not exist and results in homeowners or tenants paying twice
for certain infrastructure improvements within a development district thereby defeating any advantage
to create a Development District.
A Solution in search of a Problem
Under the current system, the Development District finances the infrastructure of a new community,
including the water and sewer system through use of a bond. The homeowner ultimately pays off the
bond through tax payments. WSSC reimburses the builder of the infrastructure with System
Development Charge credits for the water and sewer system so that the community does not pay twice
for the improvement, once when financing the improvement and the second time when the builder
pays the System Development Charge at building permit. It may appear that two agencies "pay" for the
same thing. That is not the case. The Development District funding is a loan, the WSSC payment is a
reimbursement based on SDC charges. The developer prices the homesites based on the actual cost less
any credits.
Unintended Consequences
The proposed bill places a severe penalty on use of Development Districts. Rather than providing a
source for reduced interest rates and a source of funds for financing major infrastructure improvements,
under this bill the use of a Development District places a burden on the developer and a penalty on the
development. Passage of this bill defeats any advantage to use of the Development District and
effectively kills the use of Development Districts where credits may accrue.
The use of a tax advantaged Development District concept is widely used throughout the country to
minimize the cost of making major infrastructure improvements and in some cases may well be the only
source for funding major infrastructure improvements. The county benefits, communities benefit and
homeowners benefit. Please reject Bill 23-11
Thank You
S. Robert Kaufman
Associate Director, Government Affairs
Maryland National Capitol Building Industry Association
1738 Elton Road
Suite 200
Sliver Spring, Maryland 20903
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~A~
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063983
OFFICE OF MANAGEMENT AND BUDGET
Isiah Leggett
County Executive
Joseph F. Beach
Director
MEMORANDUM
"
"
July 12,2011
~'-~' .~.
..
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I',
'I
,......"
..
TO:
FROM:
SUBJECT:
V
alene Ervin, President, County Council
JOsephF.BeaCh'~
~
Bill 23-11, Development Districts, Special Taxing Districts Duplication of
Funding
The purpose of this memorandum is to transmit a fiscal and economic impact
statement to the Council on the subject legislation.
LEGISLATION SUMMARY
By amending Chapter 14, Section 14-9 and Chapter 68C, Section 69C-4 of the
Montgomery County Code, the proposed
le~slation
would prohibit any development district
from financing any infrastructure improvement that is or may be financed or credited by any
other government agency. The legislation also similarly prohibits the White Flint Special Taxing
District from using special taxing district taxes to pay for any infrastructure improvement that is
or may be financed or credited by any other government agency.
FISCAL AND ECONOMIC SUMMARY
Enacting this legislation may have a fiscal impact to the County because
it
prohibits the County from using development district taxes to fmance infrastructure
improvements that could possibly be paid for by the State or Federal government. This would
prohibit the County from using development district taxes to pay for any project for which the
County may wish to seek State or Federal funding assistance.
It
would specifically bar the use of
development district taxes to pay for any infrastructure that
is
owned by the State or Federal
government, such as MD 355 in the White Flint Special Taxing District. Although the legislation
is
designed to prevent potential double-funding of infrastructure improvements made by
development or special taxing districts and other government entities, it will have the effect of
limiting funding options for those projects that would normally be eligible for State and Federal
funding, even ifthe County planned to have only part ofthose projects paid for with State or
Federal funds.
Office of the Director
101 Monroe Street, 14th Floor' Rockville,
Maryland
20850 • 240-777-2800
www.montgomerycountymd.gov
I()
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Valerle Ervin, President, County Council
July
12,2011
Page
2
The legislation has no qUantifiable impact on employment, personal income,
investment, or other economic variables to the Montgomery County economy as a whole.
The following contributed to
and
concurred with this analysis: Michael Coveyou,
Department of Finance, Bryan Hunt, Office ofManagement and Budget.
JFB:bh
c: Kathleen Boucher, Assistant Chief Administrative Officer
Lisa Austin, Offices ofthe County Executive
Karen
Hawkins,
Acting Director, Department of Finance
Michael Coveyou, Department ofFinance
Bryan Hunt, Office of Management and Budget
Amy Wilson, Office of Management and Budget
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
November 15,2011
TO:
FROM:
SUBJECT:
Valerie Ervin, Council President
Isiah Leggett, County
.
j~
EXeCUtiV~
~
~axing
Districts - Duplication of
Bill
11, Development Districts - specfiu
Funding
23~
The purpose of this memorandum is to share my recommendations regarding Bill
23-11, Development Districts - Special Taxing Districts - Duplication ofFunding.
Bi1l23-11 modifies the development district law codified in Chapter 14 of the
County Code and the White Flint special taxing district law codified in Chapter 68C of the
County Code by prohibiting a development district or the White Flint special taxing district from
paying for "any infrastructure improvement that has been or is likely to be financed by any other
government agency, or for which any government agency may issue any credit toward the
payment of any tax, fee, or charge."
The phrase "likely to be financed" is too ambiguous to administer.
It
will have
the unintended effect of prohibiting the use of development district taxes and White Flint special
taxes to pay for State road projects, such as the rebuilding of Rockville Pike and Old
Georgetown Road in the White Flint area, as State roads are always likely to be financed, at least
in part, by another "government agency!' I believe that the bill's intent could be achieved by
clarifying that development and special taxing districts cannot pay for improvements that are
paid for by any other government agency unless the government funding is interim financing,
forward funding, or other similar financing strategy for which a government agency will
eventually be reimbursed.
The reference to a credit for any tax, fee, or charge that a government agency
"may issue" is also ambiguous.
It
is not clear if the intent of this text is to prohibit a
development or special taxing district from paying for any infrastructure improvement that for
which a government agency: (1) could possibly issue a credit toward the payment of a tax, fee or
charge; or (2) actually issues a credit toward the payment of a tax, fee or charge. I believe that
the bill's intent could be achieved by allowing the use of either special taxes (i.e., development
district or other special taxes) or credits for an infrastructure project but not both or allowing the
montgomerycountymd.gov/311
240-773-3556 TTY
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Valerie Ervin, Council President
November 15,2011
Page 2
use ofboth special taxes and credits to the extent that they do not duplicate each other in the
context of the overall costs of the project.
I
have asked Executive staff to work with Council to modify the language in Bill
23-11 to avoid any unintended consequences or unnecessary confusion
in
implementing the bilL
If you have questions or need further clarification, please contact Mike Coveyou, Department of
Finance, at 240-777-8878.
c:
Joe Beach, Director, Department ofFinance
Diane Jones, Director, Department of Permitting Services
Art
Holmes, Director, Department ofTransportation
Marc Hansen, County Attorney
Mike Coveyou
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Bill No.
23-11
Concerning: Development
Districts.
Special Taxing Districts - Duplication
of Funding
Revised: 4-17-12
Draft No. 3
Introduced:
June 21. 2011
Expires:
December 21. 2012
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
--'-!.No::::.:n~e"__
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember EIrich, Council President Ervin, and Councilmembers Berliner and Navarro
AN
ACT to:
prohibit any development district from financing any infrastructure improvement
financed or credited by any other government agency;
(2)
prohibit the White Flint Special Taxing District from imposing a tax to pay for any
infrastructure improvement financed or credited by any other government agency;
prohibit the County from allQwing a credit toward the payment of any development
impact
tax:
or any other tax. fee. or charge. for t4at part of any infrastructure
improvement financed by a development district or the White Flint Special Taxing
District and
[[(3)]]
~
generally amend County law regarding the financing of infrastructure
improvements.
By amending
Montgomery County Code
Chapter 14, Development Districts
[[Section]] Sections 14-9 and 14-10
Chapter 68C, White Flint Special Taxing District
[[Section]] Sections 68C-3 and 68C-4
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
*
* *
(1)
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 unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act.'
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Bill No. 23-11
1
Sections
14-9~
14-10, 68C-3, and 68C-4 are amended as follows:
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3
4
5
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14-9. Second Council Resolution.
*
*
*
(h)
An
infrastructure improvement financed by a development district may
include any infrastructure required by the Planning Board as a condition
of project, preliminary, or site plan approval.
[[A]]
Except as
expr~
approved by a Council resolution. a development district must not
finance that part of the cost of any infrastructure improvement that has:
8
9
10
11
ill
[[has]] been
[[Qr
is likely to be financed)] paid for
governmentagency,QG
.hY
any other
ill
[[for which any government agency may issue any]] received a
credit toward the payment of the development impact tax or any
other tax, fee, or charge.
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13
14
15
16
17
*
14-10.
*
*
*
*
Special Taxes and Assessments.
*
(g)
The County must not allow a credit toward the payment of any
development impact tax levied under Chapter 52, Qr any other tax, fee-l
or charge. for that part of any infrastructure improvement financed by a
development district.
68C-3.
Levy of Tax; Limits.
18
19
20
21
22
23
24
25
*
ill
*
*
The County must not allow a crediLtillYard the _ payment of any
development impact tax levied under Chapter 52. or any other tax, fee,
or charge. for that part of any infrastructure improvement financed by
the White Flint Special Taxing District.
26
-2-
f:\law\bills\1123 dd, std - duplication\bill3.doc
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BILL
No. 23-11
27
68C-4.
Transportation Infrastructure Improvement Resolution.
28
29
*
[[ill]]
*
*
W
[[Al] Except as expressly approved by a Council resolution, a tax
imposed under Section
68C-3
must not
:ImY
for that part of the cost of
any infrastructure improvement that has:
30
31
32
33
ill
ill
[[has]] been [[or is likely to be financed]] paid for
Qy
any other
government agency,
QG
[[for which any government agency may issue anyl] receiveda
credit toward the payment of the development impact tax or any
other tax, fee, or charge.
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35
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Approved:
38
Roger Berliner, President, County Council
39
40
Date
Approved:
41
Isiah Leggett, County Executive
42
43
44
Date
This is a correct copy o/Council action.
Linda M. Lauer, Clerk of the Council
Date
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