Agenda Item 5A
June 30, 2015
Introduction
MEMORANDUM
June 26, 2015
TO:
FROM:
County Council
eo
Glenn Orlin, Deputy Council Administrator_
Amanda Mihill, Legislative
Attome~WtLli
SUBJECT:
Introduction:
Bill 34-15, Taxes - Transportation and School Impact Tax ­
Amendments
Bill 34-15, Taxes - Transportation and School Impact Tax - Amendments, sponsored by
Lead Sponsors Councilmembers Rice and EIrich is scheduled to be introduced on June 30,2015.
A public hearing is tentatively scheduled for July 21 at 1:30 p.m.
Bill 34-15 would:
• revise the application of the transportation and school impact tax in a former enterprise
zone;
• revise the life of a credit certified after a certain date for transportation and school
impact taxes;
• allow a transportation impact tax credit for reconstruction of an existing road;
• eliminate Metro Station Policy Areas and Clarksburg as separate tax districts and
incorporate those areas into the Countywide tax; and
• eliminate the separate tax rates within 0.5 miles of certain MARC stations.
This packet contains:
Bill 34-15
Legislative Request Report
F:\LAW\BILLS\I 534
Impact
Tax\lntro Memo.Docx
Circle #
1
7
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Bill No.
Bill 34-15
Concerning: Taxes - Transportation and
School Impact Tax - Amendments
Revised:
612312015
Draft No. _1_
Introduced:
June 30,2015
Expires:
December 30, 2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: _ _
N:....::o~n!.1::!e
_ _ _ __
ChI _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Councilrnembers
Rice
and Eirich
AN
ACT
to:
(1)
(2)
(3)
(4)
(5)
(4)
revise the application ofthe transportation and school impact tax in a former enterprise
zone;
revise the life of a credit certified after a
certain
date for transportation and school
impact taxes;
allow a transportation impact tax credit for reconstruction of an existing road;
eliminate Metro Station Policy Areas and Clarksburg as separate tax districts and
incorporate those areas into the Countywide tax;
eliminate the separate tax rates
within
0.5 miles of certain MARC stations; and
generally amend County law regarding transportation and school impact taxes.
By amending
Montgomery County Code
Chapter 52, Taxation
Sections 52-47,52-49,52-53,52-55,52-57,52-58,52-89, and 52-93
Boldface
Underlining
[Single boldface brackets]
Double undedining
[[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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BILL
No. 34-15
1
Sec.
1.
Sections 52-47, 52-49, 52-53, 52-55, 52-57, and 52-58 are amended
as follows:
52-47. Definitions.
2
3
4
In
this Article the following tenus have the following meanings:
5
*
*
*
6
White Flint Impact Tax District
means the part ofthe White Flint Metro Station
Policy Area included in the White Flint Special Taxing District in Section
68C-2.
52-49. Imposition and applicability of development impact taxes.
7
8
9
10
11
12
*
(
c)
*
*
[The following impact tax districts are established:
(1)
Metro Station:
Friendship Heights, Bethesda CBD, Grosvenor,
White Flint, Twinbrook, Rockville Town Center, Shady Grove
Metro, Silver Spring CBD, Wheaton CBD, and Glenmont Metro
station policy areas, as defined in the most recent Subdivision,
Staging policy, except as modified by paragraph (3) for the White
Flint policy area;
13
14
15
16
17
18
19
(2)
Clarksburg:
Clarksburg policy area, as defined in the most recent
Subdivision Staging Policy;
20
21
(3)
White Flint:
The part ofthe White Flint Metro Station Policy Area
included
in
the White Flint Special Taxing District in Section 68C­
2; and
22
23
(4)
General:
Any part of the County, including any municipality, not
located in an area listed in paragraphs (1)-(3).]
24
25
26
[(d)
Reserved.]
[(e)] Development impact taxes collected from developments located in the
cities of Gaithersburg and Rockville must be accounted for separately
27
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BILL
No.
34-15
28
29
30
31
32
33
34
35
36
37
38
according to the municipality where the funds originated. These tax
revenues must be used only to fund transportation improvements listed in
a memorandum of understanding between the County and the respective
City, which must be approved by the County Council. If the County and
the respective City do not agree on a memorandum of understanding
regarding the use of impact tax revenues, the County Council may
appropriate funds to improvements which are consistent with the master
plan ofthe respective City after holding separate hearing on any specific
improvement if the City so requests.
[(
t)]
@
A development impact tax must not be imposed on any building owned,
a
and used primarily, by any agency or instrumentality of federal, state,
County, or municipal government.
[(g)]
~
39
40
41
42
43
44
45
46
A development impact tax must not be imposed on:
*
(5)
*
In
*
an enterprise zone currently
any development located
designated by the State [or in an area previously designated as an
enterprise zone].
[(h)]
ill
The development impact tax does not apply to:
*
*
*
*
*
*
47
48
49
52-53. Restrictions on use and accounting of development impact tax funds.
[(h)
Development impact tax funds collected from the Clarksburg impact tax
district must be used for impact transportation improvements located in
or that directly benefit the Clarksburg policy area.]
50
51
52
53
52-55. Credits.
*
*
*
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BILL
No.
34-15
54
55
56
(b)
A property owner must receive credit for constructing or contributing to
an improvement of the type listed in Section 52-58 if the improvement
reduces traffic demand or provides additional transportation capacity.
However, the Department must not certify a credit for any improvement
in the right-of-way of a State road, except a transit or trip reduction
program that operates on or relieves traffic on a State road or an
improvement to a State road that is included in a memorandum of
understanding between the County and either Rockville or Gaithersburg.
57
58
59
60
61
62
63
*
(4)
*
*
Any credit that was certified under this subsection on or after
March 1,2004, and before February 28,2015, expires 6 years after
the Department certifies the credit. Any credit that was certified
under this subsection on or after March
L
2015, expires 12 years
after the Department certifies the credit.
64
65
66
67
68
69
*
52-57. Tax rates.
*
*
70
71
(a)
[The
tax
rates for each impact
tax
district, except] Except as provided in
subsection
(b),1
the Countywide rates for the
tax
under this Article are:
Tax per Dwelling Unit or per Square Foot ofGross Floor Area (GFA)
Building Type
[Metro Station]
[Clarksburg]
[General]
Tax
$5500
Single-family detached residential
[$2750]
[$8250]
(per dwelling unit)
Single-family attached residential
(per dwelling unit)
Multifamily residential (except
high-rise) (per dwelling unit)
High-rise residential (per dwelling
unit)
[$2250]
[$1750]
[$1250]
[$6750]
[$5250]
[$3750]
$4500
$3500
$2500
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BILL
No. 34-15
Multifamily-senior residential (per
dwelling unit)
Office (per sq. ft. GFA)
Industrial (per sq. ft. GFA)
Bioscience facility (per sq. ft.
GFA)
Retail (per sq. ft. GFA)
Place of worship (per sq. ft. GFA)
Private elementary and secondary
school (per sq. ft. GFA)
Hospital (per sq. ft. GFA)
Other nonresidential (per sq. ft.
GFA)
72
73
74
75
76
77
78
79
[$500]
[$2.50]
[$1.25]
[$0]
[$2.25]
[$0.15]
[$0.20]
[$0]
[$1.25]
[$1500]
[$6]
[$3]
[$0]
[$5.40]
[$0.35]
[$0.50]
[$0]
[$3]
$1000
$5
$2.50
$0
$4.50
$0.30
$0.40
$0
$2.50
*
(e)
*
*
[Any building that would be located within one-half mile of the
Germantown, Metropolitan Grove, Gaithersburg, Washington Grove,
Garrett Park, or Kensington MARC stations must pay the
tax
at 85% of
the applicable rate calculated in subsection (a).
(f)]
The County Council by resolution, after a public hearing advertised at
least 15 days in advance, may increase or decrease the rates set in this
Section.
80
81
82
83
84
85
86
87
[(g)]
ill
The Director ofFinance, after advertising and holding a public hearing
as required by Section 52-17(c), must adjust the
tax
rates set in or under
this Section on July 1 of each odd-numbered year by the annual average
increase or decrease in a published construction cost index specified by
regulation for the two most recent calendar years. The Director must
calculate the adjustment to the nearest multiple of 5 cents for rates per
square foot of gross floor area or one dollar for rates per dwelling unit.
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BILL
No. 34-15
88
89
90
91
92
93
94
95
The Director must publish the amount of this adjustment not later than
May 1 of each odd numbered year.
52-58. Use of impact tax funds.
Impact
tax
funds may be used for any:
(a)
New road.1 [or] widening ofan existing road.1 or total reconstruction of all
or part ofan existing road required as part ofwidening ofan existing road
that adds highway or intersection capacity or improves transit service or
bicycle commuting, such as bus lanes or bike lanes.
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
*
*
*
Sec. 2. Sections 52-89 and 52-93 are amended as follows:
52-89. Imposition and applicability of tax.
*
(c)
*
*
*
The
tax
under this Article must not be imposed on:
*
(5)
*
any development located in an enterprise zone designated by the
State [or in an area previously designated as an enterprise zone].
52-93. Credits.
*
(g)
(1)
*
*
[Any] Except for
~
credit authorized under paragraph eel:
any credit issued under this Section before February
28, 2015,
expires 6 years after the Director certifies the credit;. and
ill
any credit that was certified under this subsection on or after March
L
2015
expires
12
years after the Department certifies the credit.
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LEGISLATIVE REQUEST REPORT
Bi1l34-15
Taxes
-
Transportation and School Impact Tax
-
Amendments
DESCRIPTION:
Bi1134-15 would revise the application ofthe transportation and school
impact tax in a former enterprise zone, revise the life of a credit
certified after a certain date for transportation and school impact taxes,
allow a transportation impact tax credit for reconstruction of an
existing road, eliminate Metro Station Policy Areas and Clarksburg as
separate tax districts and incorporate those areas into the Countywide
tax, and eliminate the separate tax rates within 0.5 miles of certain
MARC stations.
The rate categories for transportation impact taxes and school impact
taxes differ. Additionally, it can be ambiguous where credits are
earned when a road is constructed.
To simplify the rate schedule and align the transportation impact tax
rate with the structure of the school impact tax, to clarify applicable
credits when a road is constructed, and to provide developers with
flexibility to use a credit that they have earned.
Departments of Permitting Services and Finance
To be requested.
To be requested.
To be requested.
To be researched.
Glenn Orlin, Deputy Council Administrator, 240-777-7936
Amanda Mihill, Legislative Attorney, 240-777-7815
Taxes are applicable within municipalities.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
F:\LAW\BILLS\l534 Impact Tax\LRR.Docx