Agenda Item 14

April 10, 2012

Public Hearing

MEMORANDUM

April 6, 2012

TO:

County Council

FROM:

SUBJECT:

Robert H. Drummer, Senior Legislative Attorney

£:J

Public Hearing:

Bill 14-12, Economic Development Fund - Amendments

Bill 14-12, Economic Development Fund

Amendments, sponsored by Council

President Berliner, and Council members Riemer, Ervin, EIrich, Leventhal and Navarro, was

introduced on March 20, 2012. A Planning, Housing and Economic Development Committee

worksession will be scheduled at a later date.

Bill 14-12 would require the Executive to propose and update an economic development

strategic plan, subject to approval by the Council. The success or progress of the strategic plan

must be measurable and include measures to address:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

job creation;

private sector compensation and benefits;

target industries;

target geographic areas;

workforce education and training;

growth in tax base;

economic opportunity for residents;

encouragement of entrepreneurs and small business;

land

use;

and

other actions necessary to promote economic development in the County.

The Bill would also amend the Economic Development Fund (EDF) law by establishing

criteria for offers of assistance from the EDF, modify the time and content of the notice the

Executive must give to the Council before making a tentative offer of more than $100,000, and

require Council approval of a tentative offer of more than $500,000.

This packet contains:

Bill 14-12

Legislative Request Report

F:\LAW\BILLS\1214 EDF Amendments\PH Memo.Doc

Circle #

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Bill No.

14

~12

Concerning: Economic

Development

Fund - Amendments

Revised: March 13,2012 Draft No. _5_

Introduced:

March 20, 2012

Expires:

September 20,2013

Enacted: _ _ _ _ _ _ _ _ __

Executive: _ _ _ _ _ _ _ _ __

Effective: _ _ _ _ _ _ _ _ __

Sunset Date: _ _ _ _ _ _ _ __

Ch. _ _, Laws of Mont. Co. _ __

COUNTY COUNCIL

FOR MONTGOMERY COUNTY, MARYLAND

By: Council President Berliner and Councilmembers Riemer, Ervin, and Elrich

AN

ACT to:

(1)

(2)

(3)

(4)

require the Executive to propose and update an economic development strategic plan

for the County, subject to Council approval;

establish criteria for offers of financial assistance from the Economic Development

Fund that promote the County's approved economic development strategic plan;

require the Council to approve certain offers of assistance from the Economic

Development Fund; and

generally amend the County economic development laws.

By amending

Montgomery County Code

Chapter 20, Finance

Sections 20-75 and 20-76

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 unaffected by bill.

The County Council for Montgomery County, Maryland approves the following Act:



BILL

No.

14-12

1

Sec.

1.

Sections 20-75 and 20-76 are amended as follows:

20-75. Use of Fund.

(a)

The Director may spend or allocate funds from this Fund consistent

with the economic development strategic plan approved under Section

20-76 and on the basis of criteria defined in a Regulation adopted under

method

(1),

including the following criteria:

(1)

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3

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5

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7

the proposed assistance will materially improve the County's

economy and advance County economic development objectives

and strategies; or

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(2) the assistance is necessary to:

(A) bring a significant number of new jobs to the County;

(B) add a significant number of new jobs to an existing

operation in the County;

(C) retain a significant number ofjobs at an existing operation

in the County or

(D) respond to other economic development objectives.

(b)

The Director must provide the Council with all fiscal analyses and other

supporting documents for any proposed offer of assistance to

2

private

employer valued at more than $100,000. The supporting documents

must include:

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ill

the name, industry, location, employee compensation profile, and

estimated current and future taxes paid

Qy

the prospective

recipient;

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ill

ill

the estimated employment and tax revenue gains resulting from

the proposed assistance;

each assumption, variable, and model used to generate estimates

of employment and tax revenue gains;

f:\law\bills\1214 edf amendments\billS.doc

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BILL

No.

14-12

28

ill

ill

the number of new residents estimated to move into the County

resulting from gains in employment

Qy

the proposed recipient;

the number and cost of new students estimated to enroll

County public schools;

In

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®

ill

(£)

an analysis of how the proposed assistance supports the overall

goals of the economic development strategy; and

offers, if any, made

Qy

or expected from other competing

jurisdictions.

The Executive must notify the Council at least

[2]

~

working days

37

38

.

before the Executive tentatively offers assistance valued at more than

$100,000 to a private employer, including all fiscal analyses and other

supporting documents described in subsection

(Q).

During a Council

recess of one week or longer, the Executive must notify the Council at

least [5] 10 working days before the Executive tentatively offers

assistance valued at more than $100,000 to a private employer.

If

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during either notice period the Council President notifies the Executive

that more time is necessary for the Council to [comment] review the

tentative offer, the Executive must wait an additional [2]

~

working

days

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(or [5] 10 working days during a Council recess) before [offering]

making

~

tentative offer of assistance to the private employer.

[(c)]

@

The Council must approve each offer of assistance to

~

private

employer valued at more than $500,000. The amount of any discount

from market value in the sale of County property offered as part of the

assistance must be included in the value of the assistance.

The

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Executive must submit an economic development agreement to the

Council within 60 days after all parties to the agreement execute it.

o

f:\law\bills\1214 edf amendments\bill5.doc



BILL

No.

14-12

54

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W

The notice required under subsection [(b)]

W

must

also specify the

proposed terms of any assistance offered, including any repayment

provIsIOns.

[(d)]

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ill

Unless expressly inconsistent with any other federal, state, or County

law, the terms of any assistance from the Fund must require the

recipient to meet certain performance criteria specified in the offer of

assistance, including a repayment agreement unless the Executive

[describes] justifies why repayment of assistance is not required.

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[(e)]

(g)

*

*

*

20-76. Economic Development Strategic Plan, Administration.

(a)

The Executive must submit

!!

proposed economic development strategic

plan for the County to the Council for approval on or before July

1

of

each even numbered year.

The Council may amend the proposed

strategic plan and must approve

f!

final strategic plan

Qy

resolution. The

success or progress of the strategic plan must be measurable and include

measures to address:

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ill

ill

ill

ill

ill

®

ill

job creation;

private sector compensation and benefits;

target industries;

target geographic areas;

workforce education and training;

growth in tax base;

economic opportunity for residents;

encouragement of entrepreneurs and small business;

land use; and

77

78

79

tID

(2)

.Q.Q)

other actions necessary to promote economic development in the

County.

f:\law\bills\1214 edf amendments\bill 5.doc

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BILL

No.

14-12

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(hl

The Executive may adopt Regulations under method (1) to administer

this Fund.

[(b)]

(£}

The Executive must report by March 15 each year on the status and

use of the Fund.

This report can be included in the Executive's

proposed operating budget. The annual report must:

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ill

describe the success of each award of financial assistance in

satisfying the economic development goals supporting the

assistance;

m

ill

identify any assistance agreement where the recipient did not

satisfy the performance criteria in the agreement; and

track the progress of the Fund in satisfying the overall goals of

the approved economic development strategic plan.

Sec. 2.

Transition.

The County Executive must submit the initial proposed economIC

development strategic plan to the Council for approval not later than 180 days after

this Act becomes law.

In

addition to the requirements of 20-76(a), the initial

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proposed economic development strategic plan must:

(a)

(b)

(c)

analyze the County's economic development structure;

compare the County's structure with peer jurisdictions;

identify and analyze different alternative government and non­

government entities that could perform each core function of economic

development;

(d)

determine the total amount of public and private money spent in each

peer jurisdiction to achieve current levels of service; and

(e)

recommend changes, if appropriate, to the County's structure.

f:\law\bills\1214 edf amendments\bill 5.doc



LEGISLATIVE REQUEST REPORT

Bill 14 -12

Economic Development Fund Amendments

DESCRIPTION:

This

Bill

would require the Executive to propose and update an

economic development strategic plan, subject to approval by the

CounciL The

Bill

would also amend the Economic Development

Fund (EDF) law by establishing criteria for offers of assistance from

the EDF, modify the time and content of the notice the Executive

must give to the Council before making a tentative offer of more than

$100,000,

and require Council approval of a tentative offer of more

than $500,000.

The County needs to establish an economic development strategic

plan and follow

it.

To establish an economic development strategic plan and ensure that

the plan is followed.

CAO, DED Director

To be requested.

To be requested.

To be requested.

To be researched.

Robert H. Drummer, Senior Legislative Attorney, 240-777-7895

To be researched.

PROBLEM:

GOALS AND

OBJECTIVES:

COORDINATION:

FISCAL IMPACT:

ECONOMIC

IMPACT:

EVALUATION:

EXPERIENCE

ELSEWHERE:

SOURCE OF

INFORMATION:

APPLICATION

WITHIN

MUNICIPALITIES:

PENALTIES:

Not applicable.

F:\LA W\BILLS\1214 EOF Amendments\LEGISLATIVE REQUEST REPORT. Doc