Agenda Item 5D
June 28, 2016
Action
MEMORANDUM
June 24, 2016
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative
Attomey~
Action:
Expedited Bill 21-16, Property Tax Credit
Property - Personal Property
Burtonsville Enterprise Zone
Expedited Bill 21-16, Property Tax Credit Burtonsville Enterprise Zone Property - Personal
Property, sponsored by Lead Sponsor Councilmember Hucker and Co-Sponsors Councilmembers
EIrich and Navarro, was introduced on May 17,2016. A public hearing was held on June 21 at
which 2 speakers - Senator Craig Zucker and Delegate Pam Queen - supported Bill 21-16.
Bill 21-16 would allow a property tax credit for certain personal property owned by certain
business entities located in the Burtonsville Crossroads Neighborhood Plan and also amend certain
definitions for the Burtonsville Enterprise Zone property tax credit.
Council staff recommendation:
enact Bill 21-16.
This packet contains:
Expedited Bil121-16
Legislative Request Report
Fiscal and Economic Impact statement
Circle
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1
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F:\LAw\BILLS\1621 Burtonsville Enterprise Zone Property\Action Memo,Docx
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Expedited Bill No.
21-16
Concerning: Property Tax Credit -
Burtonsville Enterprise Zone Property
- Personal Property
Draft No.
Revised:
5/11/2015
Introduced:
May 17. 2016
Expires:
November 17, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective:
July 1, 2016
Sunset Date:
_N~o:::,!n-",e,---
_ _ _ _ __
Ch. _ _. Laws of Mont Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Hucker
Co-Sponsors: Councilmember Eirich and Navarro
AN EXPEDITED ACT
to:
(l)
allow a property tax credit for certain personal property owned by certain business
entities located in the Burtonsville Crossroads Neighborhood Plan;
(2)
amend certain definitions for the Burtonsville Enterprise Zone property tax credit;
and
(3)
generally amend the law relating to property
tax
credits.
By amending
Montgomery County Code
Chapter 52, Taxation
Section 52-108
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. 21-16
1
Sec.
1.
Section 52-108 is amended as follows:
52-108. Burtonsville Enterprise Zone Property.
(a)
2
3
Definitions.
In this Section, the following words have the meanings
indicated:
4
5
6
*
(1)
*
*
Qualified property
means real property that:
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 commercial/residential mixed use
development and is used for a commercial purpose; and
(3)
is improved after the effective date of this Bill and before January
1, 2020 or another date provided in Section 9-317 of the Tax-
Property Article.
7
8
9
10
11
12
13
14
15
16
17
18
19
*
(b)
*
*
Credit.
(1)
Credit authorized.
The Director of Finance must allow a credit,
as authorized by State law, to a taxpayer against all County
property tax and imposed
on~
(A) improvements made by an eligible business entity to
qualified
property~
and
(ID
personal property owned
Qy
an eligible business entity
20
21
22
23
24
25
26
located on qualified property.
*
Sec. 2. Expedited Effective Date.
*
*
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect July 1,2016.
27
28
o
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LEGISLATIVE REQUEST REPORT
Expedited Bill 21-16
Property Tax Credit
-
Burtonsville Enterprise Zone Property
-
Personal Property
DESCRIPTION:
Bill 21-16 would allow a property tax credit for certain personal
property owned by certain business entities located in the Burtonsville
Crossroads Neighborhood Plan
The state law authorizing the County to adopt a this tax credits allows
the credit to extend to personal property owned by an eligible business
entity located on qualified property.
To mirror the state law authorizing the credit.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
Finance
FISCAL IMPACT:
To be requested
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
To be requested
To be researched.
To be researched.
SOURCE OF
INFORMATION:
Amanda Mihill, Legislative Attorney, 240-777-7815
APPLICATION
N/A
WITHIN
MUNICIP ALITIES:
PENALTIES:
N/A
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MEMORANDUM
June
6, 2016
TO:
FROM:
SUBJECT:
Nancy Floreen, President, County Council
Jennifer
A.
Hughes, Director, Office of Management and Bud
Joseph F.
Beach,
Director,
Department
ofFinan~~
FEIS for Bill 21-16E, Property Tax Credit - Burtonsville Enterprise Zone
Property - Personal Property
Please find attached the
fiscal
and
economic
impact statements for the above­
referenced legislation.
JAH:fz
cc: Bonnie Kirkland, Assistant Chief Administrative Otncer
Lisa Austin, Offices of the County Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick
Lacefield,
Director,
PubHc
Information Office
Joseph F. Beach, Director, Department
ofFinance
David Platt, Department of Finance
Jane Mukira. Otnce of Management and Budget
Alex Espinosa, Office of Management and Budget
Naeem Mia. Office of Management and
Budg~t
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Fiscal Impact Statement
Bill 21-16E, Property Tax Credit - Burtonsville Enterprise Zone Property­
Personal Property
1. Legislative Snmmary:
This legislation amends Section 52-1 08(b) (1) to authorize a credit on personal property
owned
by
an
eligible business entity located
on
quali:fied property.
Bill
21-
t
6E
amends
the definition of qualified property in Section 52-1 08(a)(3) as real property that "is
improved after
the effective
date ofthis
Bill
and before January
1,
2020
or another date
provided in Section
9-317
ofthe Tax-Property Article."
2. An estimate of changes in County
revenues
and expenditures regardless
of
whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions, and methodologies used.
The source of information and data include the Treasury Division (Treasury), Department
of Finance (Finance). Treasury extracted personal property data for levy years 2014 and
2015. HO''''ever, since Burtonsville Enterprise Zone (EZ) is located in the largest general
tax class, Treasury matched mailing addresses for real property tax accounts in the EZ
to
persona) property
ta.x
accounts. Second, Treasury determined which
personal
property
accounts in the County
had
mailing addresses in the EZ using electronic map coordinates.
The methodology yielded a total number of 63 accounts. Of those accounts, Treasury
detemlined that 19 accounts had an increase
in
persona) property assessments between
levy year 2014 (FY20 15) and levy year 2015 (FY20 16) and therefore
eligible
for the
credit. Based on that data and the personal property tax rate, Treasury estimates the total
amount
of
the credit in levy year 2015 (FY2016)
is
approximately $9,000.
3.
Revenue and expenditure estimates covering at least the next 6 fiscal years.
Finance assumes that the personal property a.<)sessments
fo1' those
accounts currently
eligible for the credit will increase at an average allnual rate of 1.1 percent per year and
no change
to
the personal property
tax:
rate.
FY2017:
$9,100
FY2018: $9,200
FY2019: $9,300
FY2020: $9,400
FY2021 : $9,500
FY2022: $9,600
4.
An
actuarial analysis through the entire amortization period for each
bill
that would
affect retiree pension or group insurance costs.
Not
applicable
5.
An
estimate of expenditures related to County's information technology (IT)
systems, including Enterprise Resource Planning (ERP) systems.
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Not applicable
6. Later actions that may affect future revenue and expenditures
if
tbe bill autborizes
future spending.
Not applicable
7. An estimate of the
staff
time needed to implement
the
bill.
No additional staff time is needed to implement BiH 21-16E.
8.
An
explanation of how the addition or new stafiresponsibilities would affect other
duties.
Not applicable
9.
.An
estimate
of
costs when an additional appropriation
is
needed.
Not applicable
10. A description of
any
variable that could affect revenue and cost estimates.
The variables that could affect the estimates for
tlle
current and future levy (fiscal) years
are the number of businesses located on qualified property, the assessed values
for
personal property, the number of accounts that experienced an increase in assessed
values, and the personal property tax rate.
11. Ranges of revenue or expenditures that are uncertain or difficult to project.
A
change in the variables discussed in paragraph 10 would affect the range of revenues
and therefore difficult to project.
12.
If
a
bill is likely to have no
fiscal impact,
wby that is the case.
Bill 21-16E would have a relatively small fiscal impact because of the small number of
estimated personal property accounts (19 accounts - please see paragraph 2).
13. Other
fiscal impacts or
comments.
Not applicable.
14.
The following contributed to and concurred with this analysis:
David Platt, Michael Coveyou, and Rob Hagedoorn, Department of Finance
Jane Mukira, Office of Management and Budget
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Economic .Impact
Statement
mn
21
~
16E, Property ]'ax Credit - BurtonsviUcgnterprise Z.one Pi'openy ­
Persona] Property
Background:
This legislation amends Section 52-1 08(b)(1) that authorizes a credit on personal
property owned by an eligible business entity located on qualified property. Bill 21- ]6£
amends the definition of quaJifiedproperty in Section 52-1 08(a)(3) as real property that
'<is improved
after
the
effective date of this
Bin
and
befbre
January 1, 2002
or another
date provided in Section
9-317
(~f
the Tax-Proper(v Artie!e. "
1.
The sources of information, assumptions, and methodologies used.
The source of information and data include tbe
Trea')ury
Division (Treasury),
Department ofl'inancc (Finance). Treasury extracted personal property data for levy
years 2014 and 2015. However, since BurtonsviUe
Enterprise
Zone
(EZ) is located in
the largest general ta.x class, Treasury matched mailing addresses
for
real property
tax
accounts in the EZ to personal
property
tax
accounts. Second, Treasury deten:nined
which personal property accounts in the County had mailing addresses :in the EZ
using electronic map coordinates. The methodology yielded a lotal number of 63
accounts. Oft11ose
acCOl.U1ts)
Treasury detemlined that 19 accounts had
an
increase in
personal property
a...
sessments
hetweenlevy
year 2014
and
levy
year
2015
and
therefore eligible for the credit Based on that data and the personal property
tax
rate,
Trea:sury estimates the
total
amount of the credit in ie'vy year 2015 is approximately
$9,000.
2. A
description
of
any variable
that could
affect
the
economic impact
estimates.
Based
011
the methodology presented in paragraph 1, the variables that could affect
the economic impact estimates are the number of businesses located on qualified
property, the assessed values for personal property, and the number ofaccounts that
experienced an increase in assessed values.
3. The Bill's positive or negative effect, if any on employment, spending, savings,
investment~
incomes, and
property
values
in
the County.
Based on Treasury's estimate ofa total cl'cdit of $9,000 in levy year 201 Bill
16E vvill have no significant impact on County's employment, spending, savings,
investment,
incomes, and property values.
4.
If
a BiU is likely
to
h.ave no economic im.pact,
why
is that the case?
sm
21~
16E
would
likely
have no significant impact. Plea..<Je see paragraph 3.
Page 1 of2
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Economic Impact Statement
Bm 21-HiE, Property Tax Credit -
Burton~'Vme
Enterprise
Zone
Property ­
Personal Property
5. The following contributed to or
(!oncurred with this analysis: David Platt, IlvfichaeI
Coveyou,
and
Robert Hagedoorn,
Finullce.
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'h" Director
Department
of
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DatJ
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