GO ITEM #3
December 2, 2013
Worksession
MEMORANDUM
November 27,2013
TO:
FROM:
Government Operations and Fiscal Policy Committee
Amanda Mihill, Legislative Attorney
6~
Jacob Sesker, Senior Legislative Analyst
Worksession: Bill 30-13, Taxation - Property Tax Credit
Enterprise Zone Property
Burtonsville
SUBJECT:
Bill 30-13, Taxation Property Tax Credit - Burtonsville Enterprise Zone Property, sponsored
by Councilmember Ervin, Council Vice-President Rice, Councilmembers Berliner, EIrich, and
Floreen, Council President Navarro, and Councilmembers Leventhal, Riemer, and Andrews, was
introduced on November 5, 2013. A public hearing was held on November 26 at which Delegate
Erik Luedtke and Peter Myo Khin, on behalf of the East County Citizens Advisory Board,
supported the bill.
Bill 30-13 would create a property tax credit for certain property located in the Burtonsville
Crossroads Neighborhood Plan. Materials from the chief sponsor, Council member Ervin begin
on ©6. The state law authorizing this tax credit begins on ©7.
Executive comments and recommendations
The Executive sent a memorandum expressing
support for efforts to revitalize the Burtonsville area and suggested several amendments to Bill
30-13. The Executive noted that there are differences between Bill 30-13 and the state­
designated enterprise zones. The Department of Economic Development is working to secure a
state-designated Enterprise Zone that would encompass a broader area and the Executive
believes that amending Bill 30-13 to correspond to the state enterprise zones would aid the
County's effort to market and administer the enterprise zone program.
The Executive's chart on ©20 summarizes the differences between Bill 30-13 and the state­
designated enterprise zones. As that chart notes, there are differing credit amounts offered by the
Bill and the state zones. The chart on the following page compares the credits:
 PDF to HTML - Convert PDF files to HTML files
Length of credit
Credit amount
Bill 30-13
5 years
80% of the property tax
imposed on the assessment for
each of the first 5 years
State-designated zones
10 years
80% for 5 years
70% in year 6
60% in year 7
50% in year 8
40% in year 9
30% in year 10
Council staff recommendation
Council staff is generally supportive of the Executive's
recommended amendments, with the exception of the duration and amount of the credits. The
state law establishes qualified enterprise zone properties for properties in Burtonsville.
However, the area within the boundary described by the state law does not meet the requirements
for state designation as an enterprise zone. Therefore, Council staff recommends a 5-year
property tax abatement rather than the 10-year property tax abatement allowed within a
designated enterprise zone. This distinction between the treatment of qualified enterprise zone
properties in Burtonsville and properties in actual enterprise zones reflects a public policy
interest in concentrating limited public dollars available for potential tax abatements in
geographies that are in the greatest need.
This packet contains:
Bill 30-13
Legislative Request Report
Sponsor materials
Memorandum from Councilmember Ervin
State law (HB 675)
Fiscal and Policy Note on HB 675
Testimony on HB 675 from Councilmember Ervin
Testimony from East Co. Citizens Advisory Board
Executive transmittal
Circle
#
1
5
6
7
10
14
16
18
F:\LA W\BILLS\1330 Burtonsville Enterprize Zone\GO Memo.Doc
2
 PDF to HTML - Convert PDF files to HTML files
Bill No.
30-13
Concerning: Taxation - Property Tax
Credit - Burtonsville Enterprise Zone
Property
Draft No. 1
Revised:
7/15/2013
Introduced:
November 5, 2013
May 5, 2015
Expires:
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _--:-_-:::--_ _ __
Ch. _ _, Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember Ervin, Council Vice-President Rice, Councilmembers Berliner, EIrich,
and Floreen, Council President Navarro, and Councilmembers Leventhal, Riemer, and Andrews
AN
ACT to:
(1)
(2)
create a property tax credit for certain property located in the Burtonsville Crossroads
Neighborhood Plan; and
generally amend the law relating to property tax credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section 52-18T
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:
 PDF to HTML - Convert PDF files to HTML files
BILL No. 30-13
1
Sec.
1.
Section 52-18T is added as follows:
[[52-18T]] 52-18U. Burtonsville Enterprise Zone Property.
2
3
ill
Definitions.
In this Section, the following words have the meanings
4
5
indicated:
Base year
means the taxable year immediately before the taxable year in
6
which!!: credit under this Section
to be granted.
7
8
9
Base year value
means the value of the property used to determine the
assessment on which the property tax on real property was imposed for
the base year.
Base year value
does not include any new real property
that was first assessed in the base year.
Eligible assessment
means the difference between the base year value
10
11
12
and the actual value as determined
Qy
the Department for the applicable
taxable year in which the tax credit under this Section
to be granted.
13
14
15
16
17
Eligible business entity
means !!: person who operates or conducts !!:
trade or business on qualified enterprise zone property but does not own
the qualified enterprise zone property.
Qualified property
means real property that:
18
19
ill
is located within the
encompassed
Qy
the Burtonsville
Crossroads neighborhood Plan developed
Qy
the Montgomery
County Planning Department;
20
21
ill
ill
is zoned for commercial or commercial/residential mixed use
development; and
is improved after the effective date of this Bill and before January
2020.
22
23
24
25
Tax-Property Article
means the Tax-Property Article of the Maryland
26
Code.
o
f:\law\bills\1330 burtonsville enterprize zone\bill 1.doc
 PDF to HTML - Convert PDF files to HTML files
BILL No. 30-13
27
28
(hl
Credit.
ill
Credit authorized
The Director of Finance must allow
~
credit,
29
30
31
as authorized
Qy
State law, to
~
taxpayer against all County
property tax and special area tax imposed on:
W
(hl
improvements made
Qy
an eligible business entity to
qualified property; and
personal property owned
Qy
an eligible business entity
located on qualified property.
32
33
34
35
36
ill
Duration
Q[
credit.
A credit under this Section is available to
~
qualified property for no more than
.2.
consecutive years
beginning with the taxable year following the calendar year in
which the real property initially becomes
~
qualified property.
37
38
39
40
ill
Amount
Q[
credit.
The amount of the credit is equal to 80% of the
amount of property tax imposed on the eligible assessment of the
qualified property in each of the first
.2.
taxable years following
the calendar year in which the property initially becomes a
qualified property.
41
42
43
44
45
ffi
Nonresidential portions
Q[
qualified property.
The Department
must allocate the eligible assessment to the nonresidential part of
the qualified property at the same percentage
the square
46
47
48
footages of the nonresidential part is to the total square footage of
the building.
49
50
51
ill
For purposes of calculating the amount of the credit allowed
under this Section, the amount of property tax imposed on the
eligible assessment must be calculated without reduction for any
credits allowed under the Tax-Property Article.
52
o
f:\law\bills\1330 burtonsville enterprize zone\bill1.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 30-13
53
54
55
56
57
ill
@
Regulations.
The County Executive may adopt regulations under
Method
ill
to administer this Section.
False or.fraudulent applications.
ill
A person must not knowingly file
£!
false or fraudulent
application to obtain
£!
tax credit under this Section. A violation
ofthis subsection is
£!
Class A violation.
58
59
60
61
62
ill
In addition to the penalties provided under paragraph
person who violates this subsection must
~
ill
£!
the County any
taxes, together with interest and penalties, offset
by
the credit,
any other penalty due, and the County's fees and costs in any
action to enforce this subsection.
Approved:
63
64
65
Nancy Navarro, President, County Council
Date
66
Approved:
67
Isiah Leggett, County Executive
Date
68
This is a correct copy o/Council action.
69
Linda M. Lauer, Clerk of the Council
Date
f:\law\bills\1330 burtonsville enterprize zone\bill1.doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 30-13
Property Tax Credit
-
Burtonsville Enterprise Zone Property
Taxation
DESCRIPTION:
PROBLEM:
Bill
30-13 would create a property tax credit for certain property
located in the Burtonsville Crossroads Neighborhood Plan
Changing traffic patterns and the departure of well-known stores
resulted in sales reduction for many stores in Burtonsville.
To provide incentives to invest in and improve properties throughout
the Burtonsville area.
Finance
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, Legislative Attorney 240.777.7815
To be researched.
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
F:\LA W\BILLS\1330 Burtonsville Enterprize Zone\LEGISLA TIVE REQUEST REPORT-Doc
f:\law\bills\1330 burtonsville enterprize zone\legislative request report. doc
 PDF to HTML - Convert PDF files to HTML files
MONTGOMERY COUNTY COUNCIL
ROCKVILLE. MARYLAND
VALERIE ERVIN
COUNCILMEMBER
DISTRICT
5
Memorandum
Councilmembers
To:
From: Valerie Ervin\J&­
Date: October 24,2013
Re:
Burtonsville Enterprise Zone
In December, the Council approved the Burtonsville Crossroads Neighborhood
Plan, which establishes the vision we all agree on for this area; however, a sector plan is
only one piece of the puzzle. To put all of the pieces together to create Burtonsville's full
picture, which includes a main street, public green space, and a village center, we need to
encourage private investment. The attached bill would incentivize investment and help
improve properties throughout the Burtonsville area, including the Burtonsville Crossing
Shopping Center and the strip of commercial space along Old Columbia PikelRoute 198.
As many of you know, the realignment of Route 29, which sent traffic past
Burtonsville, capped the area's commercial growth and had a dramatic impact on local
businesses. Changed traffic patterns, coupled with the relocation of the Amish Market
and the departure of Giant from Burtonsville Crossing, resulted in sales reductions for
many in the commercial area. Burtonsville Crossing is nearly empty while Burtonsville
Town Square, which opened across the street in 2010, slowly occupies empty commercial
space.
This bill creates a tax credit against the personal property tax of any eligible
business entity located within the Burtonsville Crossroads Neighborhood Plan, which
would provide assistance to small business owners. House Bill 675, which passed during
the 2013 Maryland General Assembly Session and became Chapter 134 of the Laws of
Maryland, gives the County authority to create this tax credit in Burtonsville.
I believe that this is one example of how we can work together to improve the
quality of life for residents in the eastern portion of Montgomery County. I stand ready
to work with you in support of this bill. Let me know if you would like to be added as a
cosponsor.
STELLA B, WERNER OFFICE BUILDING'
100 MARYLAND AVENUE, ROCKVILLE, MARYLAND 20850
TTY 240/777-7914
240/777-7960 OR 240/777-7900
FAX
240/777-7989
WWW,MONTGOMERYCOUNTYMD,GOY/COUNCIL
,'~
PRLNTED ON RECYCLED PAPER
 PDF to HTML - Convert PDF files to HTML files
MARTIN O'MALLEY, Governor
Ch.134
Chapter
134
(House Bill 675)
AN ACT concerning
Montgomery County - Property Tax Credit for Qualified Enterprise Zone
Property - Burtonsville
MC 14-13
FOR the purpose of altering a certain definition of "qualified enterprise zone property"
as it relates to a certain property tax credit granted by the governing body of
Montgomery County or of a municipal corporation in Montgomery County to
include certain property zoned for certain uses located in the area encompassed
by the Burtonsville Crossroads Neighborhood Plan; providing for the application
of this Act; and generally relating to a property tax credit granted by
Montgomery County or a municipal corporation in Montgomery County against
county or municipal property tax imposed on an eligible business entity on
qualified enterprise zone property.
BY repealing and reenacting, with amendments,
Article - Tax Property
Section 9-317(f)
Annotated Code of Maryland
(2012 Replacement Volume)
SECTION
1.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:
Article - Tax - Property
9-317.
(f)
indicated.
(1)
(i)
In this subsection the following words have the meanmgs
(ii)
"Eligible business entity" means a person who operates or
conducts a trade or business on qualified enterprise zone property but does not own
the qualified enterprise zone property_
(iii)
that:
1.
"Qualified enterprise zone property" means real property
A.
not used for residential purposes;
-1­
 PDF to HTML - Convert PDF files to HTML files
Ch.134
2013 LAWS OF MARYLAND
[2.]
business entity;
B.
IS used in a trade or business by an eligible
[3.]
C.
is located in an enterprise zone that IS
designated under Title 5, Subtitle 7 of the Economic Development Article; and
[4.]
9-103 of this title;
OR
D.
is eligible for the property tax credit under
§
IS
LOCATED
WITHIN
THE
AREA
ENCOMPASSED BY THE BURTONSVILLE CROSSROADS NEIGHBORHOOD PLAN
DEVELOPED BY THE MONTGOMERY COUNTY PLANNING DEPARTMENT;
COMMERCIAL
IS
ZONED
FOR
COMMERCIAL/RESIDENTIAL MIXED USE DEVELOPMENT; AND
C.
BEFORE JANUARY 1,
2020.
2.
A.
B.
OR
HAS HAD IMPROVEMENTS MADE ON IT ON OR
(2)
Subject to paragraphs (4) and (5) of this subsection, the governing
body of Montgomery County or of a municipal corporation in Montgomery County may
grant, by law, a property tax credit against the county or municipal corporation
property tax imposed on:
(i)
improvements made by an eligible business entity to
qualified enterprise zone property; and
(ii)
personal property owned by an eligible business entity
located on qualified enterprise zone property.
(3)
(i)
The governing body of Montgomery County or of a municipal
corporation in Montgomery County may provide, by law, for:
1.
the amount and duration of a credit under this
subsection;
2.
subsection; and
3.
under this subsection.
any other prOVISIOn necessary to carry out a credit
additional eligibility criteria for a credit under this
-2­
 PDF to HTML - Convert PDF files to HTML files
MARTIN O'MALLEY, Governor
Ch.134
(ii)
The governing body of Montgomery County or of a municipal
corporation in Montgomery County shall define, by law, the improvements eligible for
a credit under this subsection.
(4)
The lessor of real property granted a credit under paragraph (2)(i)
of this subsection shall reduce the amount of taxes for which an eligible business
entity is contractually liable under the lease agreement by the amount of any credit
granted under paragraph (2)(i) of this subsection for improvements made by the
eligible business entity.
(5)
The lessor of real property that receives a credit under
§
9-103 of
this title may not be granted a credit under this subsection.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
June 1, 2013, and shall be applicable to all taxable years beginning after June 30,
2013.
Approved
by
the Governor,
April 9,
2013.
 PDF to HTML - Convert PDF files to HTML files
HB675
Department of Legislative Services
Maryland General Assembly
2013 Session
FISCAL AND POLICY NOTE
House Bill 675
Ways and Means
(Montgomery County Delegation)
Budget and Taxation
Montgomery County - Property Tax Credit for Qualified Enterprise Zone
Property - Burtonsville
MC 14-13
This bill alters the definition of qualified enterprise zone property for purposes of a
specified local property tax credit in Montgomery County to include property that
(1)
is
located within the area encompassed by the Burtonsville Crossroads Neighborhood Plan
developed by the Montgomery County Planning Department; (2) is zoned for commercial
or commerciaVresidential mixed use development; and (3) has had improvements made
on it on or before January 1, 2020.
The bill takes effect June 1, 2013, and applies to taxable years beginning after
June 30,2013.
Fiscal Summary
State Effect:
None.
Local Effect:
Montgomery County has not enacted a local enterprise zone property tax
credit The county currently provides tax credits to qualifying businesses that locate
within an enterprise zone through an existing State tax credit program. Pursuant to this
bill, qualifying businesses in the Burtonsville area would be eligible for a local property
tax credit depending upon whether the county enacts the local option property tax credit.
Small Business Effect:
None.
 PDF to HTML - Convert PDF files to HTML files
Analysis
Current Law:
Montgomery County or a municipality in the county is authorized to
provide a property tax credit for improvements made by an eligible business entity to
qualified enterprise zone property; and for personal property owned by an eligible
business entity located on qualified enterprise zone property. The jurisdiction may
provide for the amount and duration of the tax credit, qualifications for eligibility, and
other provisions for the tax credit. In addition, a business entity that receives an
enterprise zone property tax credit must provide to a tenant under a lease agreement an
amount equivalent to the enterprise zone property tax credit.
An eligible business entity is defined as a person who operates or conducts a trade or
business on qualified enterprise zone property but does not own the property. Qualified
enterprise zone property is defined as real property that
(1)
is used in a trade or business
by an eligible business entity; (2) is not used for residential purposes; and (3) is located in
an enterprise zone and eligible for an enterprise zone property tax credit.
State Tax Credit Program
Businesses located within a Maryland enterprise zone are eligible for local property tax
credits and State income tax credits for 10 years after the designation of the enterprise
zone. Any business moving in after the designation qualify for the tax credits, if the
business meets all applicable eligibility standards, is certified as being in compliance by
the appropriate local government, and creates new or additional jobs or makes capital
investments. Any business that is already located in an area that is designated an
enterprise zone can qualify for the credit for the capital investment and labor force
expansion occurring after designation of the enterprise zone.
Real property tax credits are lO-year credits against local real property taxes on a portion
of the qualifying real property improvements in the enterprise zone. The State
Department of Assessments and Taxation reimburses local governments for one-half of
the cost of the property tax credit. The income tax credit is based on wages paid to newly
hired employees and can be taken over a one- to three-year period. The credits are based
on the wages paid during the taxable year to each qualified employee and vary in value
and length of time depending on whether the employee is certified from the Department
of Labor, Licensing, and Regulation as being economically disadvantaged and if the
business is located in a focus area.
Background:
Maryland's enterprise zone program is a joint effort between the State and
local governments to provide tax incentives to businesses and property owners located in
economically distressed areas. The program was created in 1982 and there are currently
30 enterprise zones in Maryland, of which three (Gaithersburg, Long Branch/Takoma
HB
6751
Page 2
@
 PDF to HTML - Convert PDF files to HTML files
Park, and Wheaton) are located in Montgomery County. In fiscal 2011, 78 businesses
were located within enterprise zones in Montgomery County and these businesses
received $1.6 million in property tax credits from the county as shown in
Exhibit 1.
Exhibit 1
Enterprise Zone Tax Credit - Montgomery County
Tax Year 2000 - 2011
Credit
Amount
Credit Amount
Per Recil!ient
Tax Year
Recil!ients
13
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$162,747
354,503
428,204
532,275
1,406,975
1,752,704
1,742,777
2,059,801
2,204,755
1,992,053
1,209,611
1,588,492
$12,519
8,057
8,739
10,437
19,274
21,117
23,237
24,233
25,054
23,715
14,751
20,365
44
49
51
73
83
75
85
88
84
82
78
Local Fiscal Effect:
Montgomery County has not enacted the local enterprise zone
property tax credit. The county currently provides tax credits to qualifying businesses
that locate within an enterprise zone through an existing State tax credit program.
Pursuant to this bill, qualifying businesses in the Burtonsville area would be eligible for
the local property tax credit assuming that the county enacts such a program. The total
cost for the additional property tax credits will depend on the number of businesses
qualifying for the local property tax credit and the tax credit amount provided under the
local program. As shown in Exhibit 1, the tax credit amount received by qualifying
businesses
in
Montgomery County under an existing enterprise zone State tax credit
program has ranged from $8,000 per recipient to over $25,000 per recipient.
HB
6751
Page 3
@
 PDF to HTML - Convert PDF files to HTML files
Additional Information
Prior Introductions:
None.
Cross File:
None.
Information Source(s):
Montgomery County. Department of Legislative Services
Fiscal Note History:
ncslhlb
First Reader - February 26,2013
Analysis by: Michael Sanelli
Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB
6751
Page 4
@
 PDF to HTML - Convert PDF files to HTML files
MONTGOMERY COUNTY COUNCIL
ROCKVILLE, MARYLAND
VALERIE ERVIN
COUNCfLMEMBER
DISTRICT
5
Testimony of Montgomery County Councilmember Valerie Ervin
Supporting
MC
14-13,
Montgomery County Property Tax Credit/or Qualified
Enterprise Zone Property
-
Burtonsville
Montgomery County House Delegation Local Bill Hearing
December 3, 2012
Chairwoman Kaiser, Vice-Chair Lee and members of the House Delegation, I
appreciate the opportunity to testify in support of MC 14-13, Montgomery County
Property Tax Credit for Qualified Enterprise Zone Property - Burtonsville. As the
Councilwoman who represents this area, I can assure you that designating Burtonsville as
a "qualified enterprise zone" will help this area receive the tax credits it needs to spur
revitalization.
As many of you know, the realignment of Route 29, which sent traffic past
Burtonsville, capped the area's commercial growth and had a dramatic impact on local
businesses. Changed traffic patterns, coupled with the relocation of the Amish Market
and the departure of Giant from Burtonsville Crossing, resulted in sales reductions for
many in the commercial area. Burtonsville Crossing is nearly empty while Burtonsville
Town Square, which opened across the street in 2010, slowly occupies empty commercial
space.
Tomorrow the County Council is scheduled to approve the Burtonsville
Crossroads Neighborhood Plan, which establishes the vision we all agree on for this area;
however, a sector plan is only one piece of the puzzle. To link all of the pieces together
to create Burtonsville's full picture, which includes a main street, public green space, and
a village center, we need to encourage private investment. This bill would incentivize
investment and improve properties throughout the Burtonsville area, including the
Burtonsville Crossing Shopping Center and the strip of commercial space along Old
Columbia PikelRoute 198.
In addition, MC 14-13 creates a tax credit against the personal property tax of any
eligible business entity located \vithin the Burtonsville Crossroads Neighborhood Plan,
STELLA B, WERNER OFFICE BUILDING·
100 MARYLAND AVENUE, ROCKVILLE, MARYLAND 20850
TTY 240/777-7914
FAX 240;777-7989
240/777-7960 OR 240/777-7900
l.:3I
Q
WWW,MONTGOMERYCOUNTYMD,GOV/COUNCIL
,!~
PRINTED ON RECYCLED PAPER
 PDF to HTML - Convert PDF files to HTML files
which would provide assistance to small business owners during this difficult economic
time.
I want to especially thank Delegates Luedtke, Kaiser, and Zucker and Senator
Montgomery for sponsoring this legislation. I believe that this is a prime example of how
state and county officials work together to improve the quality of life for the residents of
Montgomery County. I stand ready to work with you in support of this bill. Thank you
for considering my testimony.
 PDF to HTML - Convert PDF files to HTML files
November 25,2013
To: County Council President Nancy Navarro
And Council Members
Subject: Bill 30-13, Taxation-Property Tax Credit-Burtonsville Enterprise Zone Property
The East County Citizens Advisory Board (ECCAB) would like to express our strong support for
Bill 30-13, Taxation - Property Tax Credit - Burtonsville Enterprise Zone Property, and would
also like this opportunity to make a few comments and recommendations.
Last December, I went before the County Council to testify for the approval the Burtonsville
Crossroads Neighborhood Plan, which established the vision we all agree on for this area.
Many members of ECCAB are pleased with and supportive of the efforts undertaken on Bill 30­
13 and that it will provide the initial momentum with an incentive for businesses to invest in
,~
locating to the Burtonsville business zone, and/or to enhance or expand their current business
in the area. We think this measure is a good step in the right direction, but may not by all
means satisfy the level of development potential for the area. There is a need for stronger
incentive mechanisms to attract, retain and expand diverse business investments into the
targeted area and beyond, including the Burtonsville Crossing Center (BCC). The area is in
serious need of {sticky' incentives that will address the long term competitive economic viability
in the area.
We highly recommend a collaboration between the Executive Branch's Department of
Economic Development County Council and our state delegates to seek a State of Maryland
enterprise zone designation for a wider zone/area of Burtonsville, including the BCe. This
designation would complement the area with more incentives that would create a stronger
revitalization focus and bring additional investment resources in infrastructure, skills,
regeneration, business relocation and retention with long term benefits and viability (such as
enterprise zone tax credits and focus area tax credits). Other state and local resources and
options should be pursued and made available for Burtonsville in East County as well.
At the East County Leadership Summit held this past October at the Marilyn Praisner Center in
Burtonsville which was attended by members ofthe Counci" county department leadership and
citizens of East County, the two economic development priorities identified were the White Oak
Science Gateway Master Plan and the revitalization of the Burtonsville business zone as a
 PDF to HTML - Convert PDF files to HTML files
destination node for not only the citizens of East County but also the rest of Montgomery
County and to some extent Prince Georges and Howard counties. Just like Long Branch in
Takoma Park, Wheaton, Olde-Town Gaithersburg and Glenmont, Burtonsville is well deserving
of an enterprise zone designation by the State of Maryland for all the right reasons and long
term benefits for the county.
We all know the impact of the realignment of Route 29 past Burtonsville which has stunted the
area's commercial growth, the Giant grocery store refusal to negotiate on their prior store
location and departure of business at the Burtonsville Crossing Center. Businesses have been
decimated and this downwards spiral potentially will continue to exist without some injection
of incentives and assistance to businesses to stay or relocate to Burtonsville.
Not only the Burtonsville community, but also all of East County have been awaiting
redevelopment and community-focused infrastructure improvements for some time, and we
are very encouraged by the current work done by the Council to develop this Bill as a good step
in the right direction for Burtonsville and the county, and also the work done by our county
state delegation to Annapolis to be able to make this Bill possible. We encourage you to begin
working collaboratively to create a Burtonsville Enterprise Zone, inclusive of the benefits of Bill
30-13.
Signed:
Peter Myo Khin
Chair, ECCAB
Cc: Isiah Leggett, County Executive
Jewru Bandeh, ECRSC Director
@)
 PDF to HTML - Convert PDF files to HTML files
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
.-­
.'
November 26, 2013
\J'l
TO:
Nancy Navarro, President
Montgomery County Council
FROM:
SUBJECT:
lsiah Leggett, Montgomery County Executive
Bill 30-13; Taxation
Property
Property Tax Credit
Y
~
}
~
Burtonsville Enterprise Zone
I appreciate the Council's commitment to revitalize the Burtonsville Crossroads
area, and to utilize tools to stimulate development activity in this area of the County. I strongly
support these efforts.
To this goal, the Department of Economic Development is currently attempting to
secure a Maryland Enterprise Zone designation for an area in Burtonsville that goes beyond the
borders of the Burtonsville Crossroads Master Plan. Such a designation would provide more ta'{
incentives than are available through Bill 30-13, including State property
tax
credits, income tax
credits for new job creation, and exemption from the local development impact tax.
Montgomery County currently has four Enterprise Zones: Wheaton, Long
Branch/Takoma Park, Old Town Gaithersburg and Glenmont. As highlighted in the attached
chart, there are differences between the State-designated Enterprise Zone's eligibility
requirements and available ta'{ credits and what is being provided for through Bill 30-13.
In
order to achieve more uniformity between State-designated Enterprise Zones
and the requirements and tax incentives
in
Bill 30-13, I recommend several amendments to Bill
30-13.
montgomerycountymd.gov/311
240-773-3556
TrY
@
 PDF to HTML - Convert PDF files to HTML files
My amendments) which are outlined in column four of the attached chart, include:
Making commercial, not residential, properties eligible for tax credits;
Increasing the length of the tax credits to ten years;
Deleting the reference to personai property tax credits; and
Deleting the reference to special area tax credits.
Having more unifonn eligibility requirements and available tax credits
will
aid in
the County's efforts to successfully market and administer our enterprise zone program.
I
want to thank the County Council for considering these amendments.
IUtb
Attachments
2
 PDF to HTML - Convert PDF files to HTML files
Comparison of State Designated Enterprise Zones and Bill 30·13
®
 PDF to HTML - Convert PDF files to HTML files
Bill No.
30~13
Concerning: Taxation - Property Tax
Credit - Burtonsville Enterprise Zone
PropertY
Revised:
7/15/2013
Draft No. 2
Introduced:
November 5, 2013
Expires:
May 5. 2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: _ _ _ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember Ervin, Council Vice-President Rice, Councilmembers Berliner, EIrich,
and Floreen, Council President Navarro, and Councilmembers Leventhal, Riemer, and Andrews
AN
ACT to:
(1)
(2)
create a property tax credit for certain property located in the Burtonsville Crossroads
Neighborhood Plan; and
generally amend the law relating to property
tax
credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section 52-18T
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:
 PDF to HTML - Convert PDF files to HTML files
1
Sec. 1. Section 52-1ST is added as follows:
[[52-1S!]I 52-1§Y. Burtonsville Enterprise Zone Property.
2
3
4
(ill
Definitions.
In
this Section, the following words have the meanings
indicated:
5
6
Base year
means the taxable year immediately before the taxable year in
which
~
credit under this Section is to be granted.
7
Base year value
means the value of the property used to detennine the
assessment on which the property tax on real J2roJ2erty was imJ20sed for
the base year.
Base year value
does not include any new real J2roperty
that was first assessed in the base year.
8
9
10
11
12
13
Eligible assessment
means the difference between the base year value
and the actual value as detennined
Qy
the DeJ2artment for the awlicable
taxable year in which the tax credit under this Section is to be granted.
14
15
16
Eligible business entity
means
~
J2erson who ouerates or conducts
~
trade or business on qualified enterprise zone uroperty but does not own
the qualified enterprise zone J2rouerty.
17
Qualified property
means real property that:
18
19
20
ill
is located within the area encompassed
Qy
the Burtonsville
Crossroads neighborhood Plan develoued
Qy
the Montgomery
County Planning Department;
21
ill
ill
is.zoned for c ommercial or c ommercial/residential mixed u se
development[[jJJ and is used for commercial purposes; and
is imJ2roved after the effective date ofthis Bill and before January
22
23
24
25
L.2020.
Tax-Property Article
means the Tax-Property Article of the Maryland
Code.
26
- 2
-c:\documents and settings\benjat\locaJ settings\temporary internet files\oIk255\003
@
 PDF to HTML - Convert PDF files to HTML files
27
28
(Q).
Credit.
ill
Credit authorized
The Director of Finance must allow
~
credit,
29
30
as authorized
Q..y
State I aw, to
~
taxPayer against all County
propertY tax [[and special area tax]] imposed on:
31
32
ill
improvements made
Qy
an eligible business entity to
qualified propertY; and
33
34
.lliJi}
personal propertY owned
Qy
an eligible business entity
located on qualified property.]]
35
36
ill
Duration
gf
credit.
A credit under this Section is available to
~
qualified property for no more than
ll2.Il
10 consecutive years
37
beginning with the taxable year following the calendar year in
which the real property initially becomes
~
qualified property.
38
39
ill
Amount
gf
credit.
The amount of the credit is equal to 80% of the
40
amount of property tax imposed on the eligible assessment of the
qualified propertY
in
each of the first
.2.
taxable years following
the calendar year in which the property: initially becomes
~
41
42
4~
qualified property, 70% in the sixth taxable year. 60% in the
seventh taxable year.
50%
in the eighth taxable year,
40%
in the
ninth taxable year and
JQ%
in the tenth taxable year after the
propertY initially becomes qualified propertY.
44
45
46
47
ill
Nonresidential portions gf qualified property.
The Department
48
must allocate the eligible assessment to the nonresidential part of
the qualified property at the same percentage as the square
footages ofthe nonresidential part is to the total square footage of
the building.
49
50
51
52
ill
For purposes of calculating the amount of the credit allowed
under this Section, the amount of property tax imposed on the
- 3
-c:\documents and settings\benjat\local settings\temporary intemet files\olkZ55\O03
53
 PDF to HTML - Convert PDF files to HTML files
54
55
eligible assessment must be calculated without reduction for any
credits allowed under the Tax-Property Article.
(£}
56
57
58
Regulations.
The County Executive may adopt regulations under
Method
ill
to administer this Section.
@
False orfraudulent applications.
59
ill
A person must not knowingly file
~
false or fraudulent
60
61
application to obtain
~
tax credit under this Section. A violation
ofthis subsection is
~
Class A violation.
62
63
64
65
66
ill
In addition to the penalties provided under paragraph
ill
~
person who violates this subsection must 00 the County any
taxes, together with interest and penalties, offset.
Qy
the credit,
any other penalty due, and the County's fees and costs in any
action to enforce this subsection.
Approved:
67
68
Nancy Navarro, President, County Council
69
Approved:
Date
70
Isiah Leggett, County Executive
Date
71
This is a correct copy ofCouncil action.
72
Linda M. Lauer, Clerk ofthe Council
Date
- 4
-c:\documents and settings\benjat\local settings\temporary internet files\olk255\003