AGENDA ITEM 8
September 9,2014
Public Hearing
MEMORANDUM
TO:
FROM:
County Council
~
Michael Faden, Senior Legislative Attorney
Public Hearing:
Expedited Bill 37-14, Real Property Transfer Tax - Exemption
- Enterprise Zones
SUBJECT:
Expedited Bill 37-14, Real Property Transfer Tax - Exemption
Enterprise Zones,
sponsored by Councilmembers Navarro, Floreen, Riemer and Council President Rice, was
introduced on July 15, 2014. A Government Operations and Fiscal Policy Committee
worksession is tentatively scheduled for September 22 at 2:00 p.m.
Bill 37-14 would exempt transfers of rezoned property located in an enterprise zone from
the 6% rezoning transfer tax.
It
would also repeal archaic and obsolete language and references,
and make conforming and stylistic changes.
This packet contains:
Expedited Bill 37-14
Legislative Request Report
Circle #
1
6
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Expedited Bill No.
37-14
Conceming: Real Property Transfer Tax
- Exemption - Enterprise Zones
Revised:
6/30/14
Draft No.l
Introduced:
July 15,2014
Expires:
January 15, 2016
Enacted: ___________________
Executive: _______________
Effective: ______________
Sunset Date:
_N:..:;o~n.!!::e:_
___________
Ch. ____, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Navarro, Floreen, Riemer and Council President Rice
AN EXPEDITED ACT
to:
(l)
(2)
(3)
exempt from a certain provision of the real property transfer
tax
certain transfers of
rezoned property located
in
an enterprise zone;
repeal archaic and obsolete language and references, and make confonning and
stylistic changes; and
generally amend County law regarding the real property transfer tax.
By amending
Montgomery County Code
Chapter 52. Taxation
Article II, Real Property Transfer Tax
Section 52-21
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.'
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ExPEDITED BILL
No. 37 -14
1
Sec 1. Section 52-21 is amended as follows:
52-21.
Levied; amount.
There is hereby levied a tax on (1) [all transfers] each transfer in the [county]
County of a fee simple interest in real property, except
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transfer by [way of]
mortgage, deed of
trust~
or deed of trust for the benefit of creditors, (2) the initial
transfer of stock or other evidence of ownership in a cooperative housing corporation
or similar entity, and (3) [all transfers] each transfer of a leasehold interest in real
property where the lease or instrument by which a leasehold interest is [demised]
transferred contains a covenant for perpetual renewal, known as ground rent. The tax
[shall] must be computed on the value of the full consideration for [such] each
transfer at the following rates:
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*
(e)
*
*
On rezoned property, [six (6)]
Q
percent of the value of the
consideration for any transfer of real property which[, after July 1,
1971,] has been rezoned to a more intensive use at the [instance] request
of the transferor, transferee, or any other person who has or had at the
time of application for rezoning a fmancial, contractual or proprietary
interest in the property, [excluding] not including the value of
[improvements] any improvement constructed after [such] the rezoning.
"Rezoned" as used [herein shall mean] in this subsection means the
classification,
reclassification~
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or change from one zone to another of
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any property by local map amendment [by the county council sitting as
the district council for that portion of the Maryland-Washington
Regional District located within Montgomery County, on the "Zoning
Map of the Maryland-Washington Regional District in Montgomery
County, Maryland" dated
May
31, 1958, and subsequent amendments
thereto] under Chapter 59. "Rezoned to a more intensive use" [shall
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ExPEDITED BILL NO. 37
-14
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mean] as used in this subsection means a classification, reclassification.'!.
or change in zone which permits a greater number of dwelling units per
acre in any residential zone, or which permits a greater number of
permitted uses regardless of area in a commercial zone or industrial
zone, or is from any residential zone to any commercial or industrial
zone, or is from any industrial zone to any commercial zone.
"Rezoned to a more intensive use" [shall] does not include:
(1)
A zoning from a residential zone to a Planned Unit Development
Zone [under division 59-C-7 granted after January 1, 1980], if the
approved development plan, including any amendments to the
plan, does not increase the total number of permitted dwelling
units and does not permit commercial or industrial uses,
[provided however, that] but the transfer [shall] must be subject
to [additional] any tax otherwise due under this subsection if at
any time an amendment to the development plan increases the
total number of permitted dwelling units or permits commercial
or industrial uses;
(2)
A zoning from a residential zone to a commercial zone within
one [(1)] year after the property was down zoned from a
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commercial zone of equal or greater intensity to a residential
zone by sectional map amendment; [or]
(3)
A rezoning from an industrial zone to a commercial zone which:
(i)
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Is necessitated by a previously adopted amendment to [the
zoning ordinance text,] Chapter 59 that was not [upon
application or at the instance of] requested
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the
transferor, transferee, owner.'!. or former owner of the real
property, or by any person who has or has previously had
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ExPEDITED BILL
No.
37 -14
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an interest of any kind m the property, including a
contractual interest; and
(ii)
Allows establishment or continuance of a use or uses
which were permitted uses on the property under the
industrial zone immediately [prior to] before the text
amendment, to which use or uses the property was
restricted by bona fide covenants recorded among the land
records [prior to] before July 1, 1971, and which covenants
are in effect at the time of a transfer; or
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ill
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rezoning of any property that is located in an enterprise zone
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when the property is transferred.
[The tax levied and imposed in this subsection shall not apply to
transfers which are made pursuant to a bona fide written contract or
agreement of sale entered into prior to July 1, 1971; provided, that the
director of finance may require satisfactory proof that the contract or
agreement was entered into prior to such date. There shall be deducted
from the consideration as defmed in section 59-19 the] The taxpayer
may deduct from the consideration on which the tax is based any cost
[or
expense]
actually incurred by the
transferor
for public
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improvements,. such as sewer, water, roads, sidewalks, storm drainage
structures,. and permanent soil erosion and sediment control measures,
[subject to the submission to the director of finance of] if the taxpayer
submits satisfactory proof of [such] costs [or expenses] documented by
certificates from public agencies where applicable[; provided, that].1 but
the rate of [such] the
tax
on a single transfer [shall] must not exceed [six
(6)]
.Q
percent of the bona fide market value consideration for the
transfer. [Where] If a transfer is subject both to the tax imposed by this
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ExPEDITED BILL
No.
37 -14
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subsection and the tax imposed by subsection (d), the tax imposed by
this subsection [shall] must be the only tax imposed on the transfer.
Any tax collected under this subsection [shall] must be collected only
once after each rezoning to a more intensive use, and [all transfers] any
transfer that does not [subsequent to] follow a rezoning to a more
intensive use [shall] must be [taxable] taxed at the rates applicable under
other subsections of this section. The [county executive] Executive may
[from time to time] issue [written] regulations under method (3) [of
section 2A-IS of this Code, pertaining to] regarding the collection of the
tax levied in this subsection.
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*
Sec. 2.
*
*
The Council declares that this
Expedited Effective Date.
legislation is necessary for the immediate protection of the public interest. This Act
takes effect on the date when it becomes law.
Approved:
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Craig
L.
Rice, President, County Council
Date
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Approved:
Isiah Leggett, County Executive
Date
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This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk ofthe Council
Date
(V-f:\law\billS\1437 real property transfer tax-exemption-enterprise zones\14xx bill 3.doc
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LEGISLATIVE REQUEST REPORT
Expedite Bi1137-14
Real Property Transfer Tax
-
Exemption
-
Enterprise Zones
DESCRIPTION:
Exempts transfers of rezoned property located in an enterprise zone
from the 6% rezoning transfer tax. Repeals archaic and obsolete
language and references, and makes conforming and stylistic
changes.
The current rezoning transfer tax acts as a disincentive to needed
redevelopment in enterprise zones.
To encourage redevelopment in enterprise zones
Department of Finance
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905
Transfer tax applies county-wide.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMP ACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
Not applicable
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