Agenda Item 4A
Robert Drummer, Senior Legislative Attorne
Glenn Orlin, Deputy Council Administrator
School Improvement - Amendments
Bill 37-16, Taxation - Development Impact Tax - Transportation and Public
Bill 37-16, sponsored by Lead Sponsor Council President Floreen at the request of the Planning
Board, was introduced on August 2,2016. A public hearing was held on September 13. Government
Operations and Fiscal Policy Committee worksessions were held on September 22, October 6, October
20, and October 27. Council worksessions were held on October 25, November 1, November 3, and
A briefhistory ofimpact taxes in Montgomery County.
The Council approved the initial impact fee
. law in 1986, and at the time it applied only in Germantown and Eastern Montgomery County (Fairland, White
Oak, and Cloverly), then the fastest growing areas. After the Court ofAppeals found in 1990 that the County
did not have authority to impose the impact fee it had enacted
the Council enacted Emergency Bill 33-90
that transformed the fee to an excise tax, but most other aspects of the law remained unchanged. After the
approval ofthe Clarksburg Master Plan in 1994, the Council extended the tax to Clarksburg. Funds collected
in each of these areas could be spent only on projects within the respective areas that were explicitly listed in
the law, most of which were new roads, road widenings, and park-and-ride lots. Taxes were collected prior
to the issuance of building permits. The cost of capacity-adding projects built by a development were
creditable against the tax.
2001, Bill 47-01 (effective July 2002) established transportation impact taxes countywide. It
created a new "County" District that encompassed all areas not within Germantown, Eastern Montgomery
County, and Clarksburg, and established its own rote schedule. It created separnte accounts for Rockville and
Gaithersburg, noting that funds within each municipality could be spent only on projects that served them,
respectively. It set the rates in Metro Station Policy Areas at half ofthe County District rates.
of projects in the law, replacing it with several categories of projects that were eligible; the
categories were no longer simply auto-based, but included such elements as added Ride On buses and shelters,
new or expanded transit centers, hiker-biker trails, sidewalk connectors, and bike storage facilities. Two years
Eastern Diversified Properties, Inc.
39 Md. 45, 570 A.2d 850