Agenda Item 7
July 21,2015
Public Hearing
MEMORANDUM
July 17,2015
TO:
FROM:
County Council
SOGlenn Orlin, Deputy Council Administrator
CVV""Amanda Mihill, Legislative Attorney
Public Hearing:
Bill 34-15, Taxes - Transportation and School Impact Tax ­
Amendments
SUBJECT:
Bill 34-15, Taxes - Transportation and School Impact Tax - Amendments, sponsored by
Lead Sponsors Councilmembers Rice and EIrich was introduced on June 30, 2015. A Government
Operations and Fiscal Policy Committee worksession will be scheduled at a later date.
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.
After the introduction of this bill, technical corrections were identified. See chart on ©5
and line 102 on ©6.
This packet contains:
Bill 34-15
Legislative Request Report
F:\LAw\BILLS\lS34 Impact Tax\PH Memo 7-21-1S.Docx
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Bill No.
Bill 34-15
Concerning: Taxes - Transportation and
School Impact Tax - Amendments
Draft No.
~
Revised:
7/1312015
Introduced:
June 30, 2015
Expires:
December 30,2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: _---'N"""o:<.!.n=e-::--_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Councilmembers 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 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 thefollowing Act:
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BILL
No.
34-15
1
2
Sec.t. Sections 52-47, 52-49, 52-53, 52-55, 52-57, and 52-58 are amended
as follows:
52-47. Definitions.
In this Article the following terms have the following meanings:
3
4
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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
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12
13
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15
*
(c)
(1)
*
*
[The following impact tax districts are established:
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;
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19
(2)
Clarksburg:
Clarksburg policy area, as defmed in the most recent
Subdivision Staging Policy;
20
21
22
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(3)
White Flint:
The part of the White Flint Metro Station Policy Area
included in the White Flint Special Taxing District in Section 68C­
2; and
(4)
General:
Any part of the County, including any municipality, not
located in an area listed in paragraphs (1 )-(3).]
24
25
[(d)
Reserved.]
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27
[(e)] Development impact taxes collected from developments located in the
cities of Gaithersburg and Rockville must be accounted for separately
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BILL No. 34-1S
28
29
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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 a separate hearing on any specific
improvement if the City so requests.
[(f)] @Adevelopmentimpacttaxmustnotbe imposed on any building owned,
and used primarily, by any agency or instrumentality of federal, state,
County, or municipal government.
[(g)] WA development impact tax must not be imposed on:
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*
(5)
*
In
*
an enterprise zone currently
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46
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:
*
*
[(h)
*
*
*
*
47
48
49
52-53. Restrictions on use and accounting of development impact tax funds.
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
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(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
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*
(4)
*
*
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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.
68
*
52-57.
Tax rates.
(a)
*
*
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70
[The tax rates for each impact tax district, except] Except as provided in
71
.
subsection
(b)~
the Countywide rates for the tax under this Article are:
Tax per Dwelling Unit or per Square Foot
Qf
Gross Floor Area
I
GFA)
[Metro Station]
[Clarksburg]
[General]
Building Type
Tax
Single-family detached residential
(per dwelling unit)
Single-family attached residential
(per dwelling unit)
Mul tifamily residential (except
high-rise) (per dwelling unit)
High-rise residential (per dwelling
[$2750]
[$2250]
[$1750]
[$1250]
[$8250]
[$6750]
[$5250]
[$3750]
$5500
$4500
$3500
$2500
unit)
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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)
Cultural institution
Charitable, philanthropic
institution
Other nonresidential (per sq. ft.
GFA)
[$500]
[$2.50]
[$1.25]
[$0]
[$2.25]
[$0.15]
[$0.20]
[$0]
[[$0.20]]
[[$0]]
[$1.25]
[$1500]
[$6]
[$3]
[$0]
[$5.40]
[$0.35]
[$0.50]
[$0]
[[$0.50]]
[[$0]]
[$3]
$1000
$5
$2.50
$0
$4.50
~
$0.40
I
$0
$0.40
$0
$2.50
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*
(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).
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(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.
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[(g)]
ill
The Director of Finance, 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
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BILL
No.
34-15
86
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.
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 of an existing road.1 or total reconstruction of all
or part of an 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.
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*
*
*
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101
Sec. 2. Sections 52-89 and 52-93 are amended as follows:
52-89. Imposition and applicability of tax.
*
(c)
*
*
10
*
The tax under this Article must not be imposed on:
*
(5)
*
an enterprise zone currently
102
103
104
any development located
designated by the State [or in an area previously designated as an
enterprise zone].
52-93. Credits.
105
106
*
(g)
(1)
*
*
107
108
[Any] Except for
~
credit authorized under paragraph
~
any credit issued under this Section before February 28, 2015,
expires 6 years after the Director certifies the
credit~
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110
and
ill
any credit that was certified under this subsection on or after March
111
112
L
2015 expires 12 years after the Department certifies the credit.
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LEGISLATIVE REQUEST REPORT
Bill 34-15
Taxes
Transportation and School Impact Tax Amendments
DESCRIPTION:
Bill
34-15
would revise the application ofthe transportation and school
impact tax in a fonner 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 ofPennitting 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\1534
Impact
Tax\LRR.Docx