Agenda Item 4A
November 15,2016
Action
MEMORANDUM
November 10,2016
TO:
FROM:
County Council
~
\
(JJ
Robert Drummer, Senior Legislative Attorne
Glenn Orlin, Deputy Council Administrator
School Improvement - Amendments
SUBJECT:
Action:
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
November 8.
Background
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
1,
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.
In
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.
It
also deleted
the explicit
list
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
I
Eastern Diversified Properties, Inc.
v.
Montgomery County,
39 Md. 45, 570 A.2d 850
(I
990).
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later the County District and the Germantown and Eastern Montgomery County areas were combined into a
new "General" District. Early in this decade further amendments to the law deferred the payment of the tax
for housing to 6 months after permit issuance or final inspection (whichever is earlier)2, established
bike sharing stations as an eligible expense, and extended the use ofcredits to 12 years. Several amendments
over the years exempted (or set $0 rates) for certain types ofdevelopment: development in existing and former
enterprise zones, affordable dwelling units, hospitals, bioscience facilities, social service agencies, and
charitable institutions.
The Council approved a countywide school impact tax in 2003 (effective 2004) which applied only
to residential development. Rates were set for single-family-detached houses, townhouses, low-rise
apartments (up to 4 stories) and high-rise apartments. The rates for single-family-detached houses and
townhouses also included a surcharge for larger homes. Senior housing had a $0 rate. There was one set of
rates countywide, and funds collected anywhere in the County could be spent on any capacity-adding school
project in the County. Under both the transportation and school taxes, affordable dwelling units and
development in existing and (starting in 2007) former enterprise zones were exempted. A law enacted in
2015 provides that if a development includes at least 25% affordable units, all units in that development are
exempt from both taxes.
Impact tax collections over the years have fluctuated widely, reflecting the varying activity in the
building industry. Transportation impact tax collections have been especially volatile, due to the
.
unpredictability of when credits (which can be substantial) are cashed in.
Revenue from Impact Taxes since FY 2005
Year
FY05
FY06
FY07
FY08
FY09
FYI0
FY11
FY12
FY13
FY14
FY15
FY16
School
$7,695,345
6,960,032
9,562,889
6,766,534
7,925,495
11,473,071
14,480,846
16,462,394
27,901,753
45,837,274
32,676,773
23,349,333
Transportation
$8,470,768
6,252,060
11,500,814
9,743,841
2,398,310
3,812,138
5,444,115
6,352,481
13,179,898
20,274,781
16,632,489
9,114,573
Impact taxes constitute about one ofevery eight dollars spent on school capital projects. The funding
sources for MCPS's Approved FY17-22 CIP are comprised of:
2
For non-residential, 12 months after permit issuance or final inspection, whichever is sooner.
2
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Source
G.O. Bonds/Current Revenue
Recordation Tax
State Aid
School Impact Tax
School Facility Payments
Total
Fundin~
Funding
Pro~rammed
$834,292,000
$373,700,000
$308,628,000
$210,985,000
$1,854,000
$1,729,459,000
% of Total
48.3%
21.6%
17..8%
12.2%
0.1%
100.0%
Impact taxes are projected to fund $50,605,000 (4.5%) of the $1,120,821,000 transportation capital program
in FYI7-22.
Bill 37-16, as amended
Bill 37-16, as introduced, included the amendments to the law governing the development impact
tax for transportation and public school improvements proposed by the Planning Board as part of the
quadrennial update to the rules by which the Adequate Public Facilities Ordinance (APFO) is implemented
in the Subdivision Staging Policy (SSP). Bill 37-16, as amended by the Council in its worksessions on
November 1, November 3, and November 8 is at ©1-26. The major amendments to the current law
governing the development impact tax for transportation and public school improvements are discussed
below.
1.
Removal of tax rates from the law and established by Council Resolution.
Currently, the impact tax tables are adopted in the law and then revised by resolution every 2 years.
The result is that after the first revision of the tax rates by resolution, the tax tables contained in the law
are out of date. Bill 37-16 would delete the tax tables from the law and require the Council to establish
the tax rates by resolution. A resolution to establish the new tax rates was introduced on September 27
and a public hearing was held on October 18. This resolution is tentatively scheduled for adoption by the
Council on November 15.
2. Eliminate the school facility payment.
The 2003 Growth Policy introduced the concept ofthe school facility payment (SFP), but not until
the 2007 Growth Policy, when the threshold was lowered, did it have an effect. Since 2007 a developer
has had the option to pay the SFP to meet the school test if the enrollment/capacity ratio at a cluster/level
exceeds 105%3 but is under 120%. The SFP rates have been set at 60% of the capital cost/student seat at
each level, based on the average cost of a new school at each level. The development would pay the
cost/student seat rate for the number of seats at each level it generates above 105% capacity, so in some
clusters there could be two or even three sets of payments. The payments are made concurrently with
impact taxes: 6 months after issuing a building pennit or at
fmal
inspection, whichever is earlier. The first
SFP payments were made in FYll; over the FYll-16 period only $4,957,329 has been collected. SFP
payments fund only 0.1 % ofMCPS's Approved FY17-22 CIP.
Bill 37-16, as amended, would eliminate the SFP. The lost revenue would be recouped by
increasing the school impact tax.
3
In 2007 the Planning Board and BOE had recommended 110% as the threshold for the SFP.
3
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3. Split the credit for providing a better accessibility standard equally between the transportation
impact tax and the school impact tax.
Code §52-58 provides credits to the school impact tax law for providing certain levels ofaccessibility
standards:
(e)
(1)
A property owner must receive a credit for constructing or contributing to the cost of
building a new single family residence that meets Level I Accessibility Standards, as
defined in Section 52-107(a).
(2)
The credit allowed under this Section must be as follows:
(A)
If at least 5% of the single family residences built in the project meet Level I
Accessibility Standards, then the owner must receive a credit of $500 per
residence.
(B)
If at least 10% of the single family residences built in the project meet Level I
Accessibility Standards, then the owner must receive a credit of $1,000 per
residence.
(C)
Ifat least 25% of the single family residences built
in
the project meet Level I
Accessibility Standards, then the owner must receive a credit of $1,500 per
residence.
(D)
Ifat least 30% ofthe single family residences built
in
the project meet Level I
Accessibility Standards, then the owner must receive a credit of $2,000 per
residence.
(3)
Application for the credit and administration of the credit be in accordance with
Subsections 52-107(e) and
(t).
(4)
A person must not receive a property tax credit under this Section if the person
receives any public benefit points for constructing units with accessibility features
under Chapter 59.
There is no comparable credit for the transportation impact tax. Bill 37-16 would add the same credit
for the transportation impact tax, but split the amount of the credit equally between the transportation and
school impact tax owed.
4. Eliminate the transportation mitigation payment.
In
the 2012-2016 Subdivision Staging Policy, the Council created a new policy area transportation
test called Transportation Policy Area Review (TPAR), which expanded the time-horizon of "countable"
4
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projects to those programmed for completion within 10 years. TPAR has a road component and a transit
component. The road component calculates the future average congestion in the peak: direction during
peak: periods on major roads in a policy area and compares that average to a standard specific to that policy
area. If the average road congestion forecasts to fail the standard, then a development can proceed only
by paying an additional traffic mitigation fee equal to 25% of the applicable transportation impact tax.
The transit component assesses whether a policy area has sufficient local bus service-in tenns of
coverage, frequency, and span (the hours of bus service during a nonnal weekday)-measured against
policy-specific standards for coverage, frequency, and span. If local bus service cannot meet the
standards, then, again, a development can proceed only by paying an additional traffic mitigation fee equal
to 25% of the applicable transportation impact tax. If a policy area fails both the road and transit
components, then a 50% surcharge is required.
Bill 37-16 would eliminate the TPAR test and the transportation mitigation payment. Instead, the
lost revenue would be recouped by increasing the transportation impact tax rates in certain policy areas.
5. New classification of policy areas.
Bill 37-16, as proposed by the Planning Board, was to categorize the planning areas into four
geographic groups according to relative transit service and accessibility. "Red" policy areas are the current
MSPAs; "Orange" policy areas are corridor cities (but not MSPAs), town centers, and emerging transit­
oriented development areas where transitways (purple Line, BRT lines) are planned; "Yellow" policy areas
are lower density residential neighborhoods with community-serving commercial areas; and "Green" policy
areas are the Agricultural Reserve and other rural areas.
Bill 37-16, as amended, continues this categorization with some changes. The Bill would create a
new Clarksburg Town Center policy area in the Orange group and leave the rest of Clarksburg in the Yellow
group and create a new Burtonsville Crossroads policy area in the Orange Group and leave the rest' of the
Fairland/Colesville policy area in the Yellow group. The maps showing each group would be established in
the SSP.
6. New discounts and exemptions.
Bill 37-16, as amended, would establish a $0.00 transportation tax rate for places ofworship. The Bill
would also impose the same transportation impact tax rate on a clergy house.
Bill 37-16 would also exempt a farm tenant dwelling from the transportation impact tax, but not the
school impact tax. Ifthe property is no longer used as a farm tenant dwelling, the property owner is required
to pay the transportation impact tax that would have been due under existing Code §52-42(k), which states:
(k)
If,
within 10 years after a building permit is issued, any person changes the use ofall or part
ofa building to a use for which a higher tax would have been due under this Article when the
building permit was issued (including a changefrom a status, use, or ownership that is exempt
from payment to a status, use, or ownership that is not so exempt), the owner ofthe building
must within 10 days after the change in status, use, or ownership pay all additional taxes that
would have been due
if
the building or part ofthe building had originally been used as it is
later used
If
the building owner does notpay any additional tax when due, each later owner
5
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is liable for the tax, and any interest or penalty due, until all taxes, interest, and penalties are
paid
Bill 37-16 would also create a new exemption from transportation and school impact
tax
for a house
built by
high
school students in a program operated by the Montgomery County Board of Education.
7.
Effective date.
Bill 37-16, as amended, would take effect on March 1,2017. The amendments to the development
impact
tax
for transportation improyements and the development impact tax for public school improvements
would apply to any application for a building permit filed on or after March 1,2017. A property owner who
applies for subdivision approval before January 1, 2017, the proposed effective date of the SSP, must pay a
transportation mitigation payment and a school facilities payment at rates the Council establishes by
resolution unless the property owner applies for a building permit on or after March 1, 2017.
This Packet Contains:
Bill 37-16, as amended
Circle #
1
f:\\aw\biIls\1637 impact tax - amendments ssp\action memo for bill 37-16.docx
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Bill No.
37-16
Concerning: Taxation - Development
Impact Tax - Transportation and
Public School Improvements
Amendments
Revised: November 10.2016 Draft No. 10
Introduced:
August 2.2016
Expires:
February 2. 2018
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
--'N~o~n!!::e
_ _ _ _ __
Ch. _ _' Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the request of the Planning Board
AN
ACT to:
(1)
modify the method of calculating the transportation and public school impact tax;
(2)
create new transportation tax districts associated with policy area categories;
(3)
adjust the transportation impact tax for residential uses based on Non-Auto Driver
Mode Share associated with each tax district;
(4)
adjust the transportation impact tax for non-residential uses based on Vehicle Miles
of Travel associated with each tax district;
(5)
[[authorize an adjustment to the transportation impact tax for providing parking below
the minimum required under Chapter 59]] exempt certain student-built houses from
the impact tax;
(6)
[[modify the public school impact
tax
payable for property located in a former
enterprise zone]] eliminate the transoortation mitigation payments for certain proj ects:
ill
eliminate the school facilities payments for certain projects: [[and]]
[[(7)]]
00
exempt certain farm tenant dwelling units from the impact tax for
transportation improvements: and
generally amend County law concerning the development impact tax for
transportation and public school [[impact
tax]]
improvements.
By amending
Montgomery County Code
Chapter 52, Taxation
Sections 52-39, 52-40. 52-45, 52-47, 52-49, 52-50, 52,51, 52-52, 52-54, 52-55, 52-56, 52­
58, and 52-59.
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.
37-16
1
Sec.
1.
Sections 52-39, 52-40. 52-45, 52-47, 52-49, 52-50, 52,51, 52-52, 52­
54, 52-55, 52-56, 52-58, and 52-59 are amended as follows:
52-39. Definitions.
In this Article the following tenns have the following meanings:
2
3
4
5
Additional capacity
means a new road, widening an existing road, adding an
additional lane or tum lane to an existing road, or another transportation
improvement that:
(1)
increases the maximum theoretical volume of traffic that a road or
intersection can accommodate.1 or implements or improves transit,
pedestrian and bike facilities or access to non-auto modes oftravel; and
(2)
is classified as a minor arterial, arterial, parkway, major highway,
controlled major highway, or freeway in the County's Master Plan of
Highways, or is similarly classified by a municipality. The Director of
Transportation may fmd that a specified business district street or
industrial street also provides additional capacity as defmed in this
provISIon.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Additional capacity
is sometimes referred to as added
"highway capacity,"
"transportation capacity,"
or
"intersection capacif)1'.
*
*
*
Charitable, philanthropic institution
means a private, tax-exempt organization
whose primary function is to provide services, research, or educational activities
in areas such as health, social service, recreation, or environmental conservation.
21
22
23
Clergy House
means a single-family dwelling unit provided for the designated
religious leader of a place of worship to live.
24
25
26
27
Construction
means the planning. design. acquisition of land.. site
improvements. utility relocation. building. and initial furniture and equipment
for a capital project.
o
(~
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BILL
No.
37-16
28
29
*
*
*
Farm tenant dwelling
means a dwelling unit under the control of the owner or
30
31
operator of the farm on which the dwelling unit is located and occupied by an
agricultural worker actively engaged in fanning on a full-time or part-time basis.
Farm Tenant Dwelling includes up to three mobile homes. A Farm Tenant
Dwelling is not restricted by the defmition of household.
32
33
34
35
*
52-40. Findings; purpose and intent.
*
*
36
37
(a)
The master plan of [[highways]] transportation indicates that certain
[[roads]] transportation facilities are needed in planning policy areas.
Furthermore, the [[Growth]] Subdivision Staging Policy indicates that the
amount and rate of growth projected in certain planning policy areas will
place significant demands on the County for provision of [[major
highways]]
transportation
facilities
necessary
to
support
and
38
39
40
41
42
accommodate that growth.
43
44
45
*
(e)
*
*
The development impact tax [[will fund]] funds, in part, the
improvements necessary to increase the transportation system capacity,
thereby allowing development to proceed. Development impact taxes
[[will be]] are used exclusively for impact transportation improvements.
46
47
48
49
50
51
(f)
In order to assure that the necessary impact transportation improvements
are constructed in a timely manner, the County [[intends to assure]]
assures the availability of funds sufficient to construct the impact
transportation improvements.
52
53
54
(g)
The County retains the power to determine the types of impact
transportation improvements to be funded by development impact
taxes[[; to estimate the cost ofsuch improvements; to establish the proper
G
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BILL
No. 37-16
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59
60
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timing of construction of the improvements so as to meet APFO policy
area transportation adequacy standards where they apply; to determine
when changes, if any, may be necessary in the County CIP;]] and to do
all things necessary and proper to effectuate the purpose and intent ofthis
Article.
(h)
The County intends to further the public purpose of ensuring that an
adequate transportation system is available in support of new
development.
(i)
[[The County's findings are based on the adopted or approved plans,
planning reports, capital improvements programs identified in this
Article, and specific studies conducted by the Department of
Transportation and its consultants.
62
63
64
65
66
67
G)]]
The County intends to impose development impact taxes until the County
has attained build-out as defined by the General Plan.
68
69
52-41. Imposition and applicability of development impact
taxes.
70
71
72
73
(a)
A development impact
tax
must be imposed before a building permit is
issued for development in the County.
(b)
An applicant for a building permit must pay a development impact tax in
the amount and manner provided in this Article, unless a credit in the full
amount of the applicable tax applies under Section 52-47 or an appeal
bond is posted under Section 52-48.
74
75
76
77
78
79
80
(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
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No.
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81
Staging policy, except as modified by paragraph (3) for the White
Flint policy area;
82
83
(2)
Clarksburg:
Clarksburg policy area, as defined in the most recent
Subdivision Staging Policy;
84
85
86
87
(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]
88
89
90
91
ill
Red Policy Areas:
Bethesda CBD, Friendship Heights, Grosvenor,
Glenmont, Rockville Town Center, Shady Grove Metro Station,
Silver Spring CBD, Twinbrook, and Wheaton CBD Metro Station
Policy Areas;
92
93
94
ill
Orange Policy Areas:
Bethesda/Chevy Chase, Burtonsville
Crossroads. Chevy Chase Lake, Clarksburg Town Center,
Derwood, Gaithersburg
~
Germantown Town Center,
95
96
97
KensingtonlWheaton, Long Branch, North Bethesda, R&D
Village,
Rockville
~
Silver
Spring/Takoma
Park,
TakomalLangley, White Flint. except the portion that is included
in the White Flint Special Taxing District in Section 68C-2. and
White Oak Policy Areas;
98
99
100
101
102
ill
Yellow Policy Areas:
Aspen Hill, Clarksburg. Cloverly,
Germantown West,
F airlandiColesville, Germantown East,
Montgomery Village/Airpark, North Potomac, Olney, and
Potomac Policy Areas; and
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104
105
106
107
ill
[(4)
Green Policy Areas:
Damascus, Rural East, and Rural West Policy
Areas.
General:
Any part of the County, including any municipality, not
located in an area listed in paragraphs (1) - (3).]
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BILL 1\10.
37-16
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109
(d)
[[Reserved]] A Clergy House must pay the impact tax rate that applies to
a place of worship ifthe house:
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111
112
113
114
115
ill
(2)
is on the same lot or parcel. adjacent to. or confronting the property
on which the place of worship is located; and
is incidental and subordinate to the principal building used by the
religious organization as its place ofworship.
The place of worship tax rate does not apply to any portion of a Clergy
House that is nonresidential development.
116
117
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121
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123
124
125
126
127
128
129
130
131
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133
*
(g)
*
*
A development impact tax must not be imposed on:
*
(5)
*
*
any non-exempt dwelling unit in a development in which at least
25% ofthe dwelling units are exempt under paragraph
(l),
(2), (3),
or (4), or any combination ofthem; [[and]]
(6)
any development located in an enterprise zone designated by the
State or in an area previously designated as an enterprise
[[and]]
zone~
ill
LID
a house built by high school students under a program operated by
the Montgomery County Board of Education; and
a farm tenant dwelling.
*
*
*
*
*
*
52-45. Restrictions on use and accounting of development impact tax funds.
[[(h) Development impact
tax
funds collected from the [Clarksburg impact tax
district] Red Policy Areas must be used for impact transportation
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No. 37-16
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improvements located in or that directly benefit [the Clarksburg] those
policy [area] areas.]]
52-47. Credits.
(a)
[[(1)]]
A property owner is entitled to a credit ifthe owner, before July 1,
2002, entered into a participation agreement, or a similar
agreement with the state or a municipality, the purpose of which
was to provide additional transportation capacity. A property
owner is also entitled to a credit if the owner receives approval
before July 1, 2002, of a subdivision plan, development plan, or
similar development approval by the County or a municipality that
requires the owner to build or contribute to a transportation
improvement that provides additional transportation capacity. The
Department ofTransportation must calculate the credit. The credit
must equal the amount of any charge paid under the participation
agreement. The Department may give credit only for building
pennit applications for development on the site covered by the
participation agreement.
[[(2) (A)
An entity that received more than $20 million in credits
under this subsection that were certified before July 1, 2002,
may apply any unused credit to satisfy an obligation under
Policy Area Mobility Review, or any applicable successor
policy area transportation test, if:
(i)
the County Executive has identified the project for
which a credit would be applied under this paragraph
as a strategic economic development project; and
(ii)
the credit is used before November 1,2015.
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CB)
The total of any credits used under this paragraph to satisfy
an obligation under Policy Area Mobility Review, or any
applicable successor policy area transportation test, much
not exceed $1.7 million.]]
*
Cd)
*
*
Any credit for building or contributing to an impact transportation
improvement does not apply to any development that [is] has been
previously approved under the Alternative Review Procedure for Metro
Station Policy Areas in the County Subdivision Staging Policy.
*
*
*
U)
ill
A property owner must receive a credit for constructing or
contributing to the cost of building a new single family residence
that meets Level I Accessibilitv Standards. as defined in Section
52-107Ca).
173
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177
178
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181
182
183
184
185
186
ill
The credit allowed under this Section must be as follows:
CA)
If at least 5% of the single family residences built in the
project meet Level I Accessibilitv Standards. then the owner
must receive a credit of $250 per residence.
!B)
If at least 10% of the single family residences built in the
project meet Level I Accessibilitv Standards. then the owner
must receive a credit of $500 per residence.
(Q
If at least 25% of the single family residences built in the
project meet Level I Accessibility Standards. then the owner
must receive a credit of$750 per residence.
CD)
If at least 30% of the single family residences built in the
project meet Level I Accessibility Standards. then the owner
must receive a credit of $1.000 per residence.
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189
190
191
192
193
194
195
196
197
198
199
ill
ill
Application for the credit and administration of the credit be in
accordance with Subsections 52-1 07(e) and
(t).
A person must not receive a property
tax
credit under this Section
if the person receives any public benefit points for constructing
units with accessibility features under Chapter 59.
(k)
After a credit has been certified under this Section, the property owner or
contract purchaser to whom the credit was certified may transfer all or
part of the credit to any successor in interest of the same property.
However, any credit transferred under this subsection must only be
applied to the
tax
due under this Article with respect to the property for
which the credit was originally certified.
52-49. Tax rates.
(
a)
The Council must establish the tax rates for each impact tax district,
except as provided in subsection (b). by resolution. after a public hearing
advertised at least 15 days in advance.
[[are:]][
200
201
202
Tax per Dwelling Unit or per Square Foot
ofGross Floor Area (GFA)
Building Type
Metro
Station
Clarksburg General
Single-family
detached
residential (per
dwelling unit)
Single-family
attached
residential (per
dwelling unit)
$2,750
$8,250
$5,500
$2,250
$6,750
$4,500
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BILL No. 37-16
Multifamily
residential
(except high-rise)
(per dwelling
unit)
High-rise
residential (per
dwelling unit)
Multi family-
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)
203
] [[
$1,750
$5,250
$3,500
$1,250
$3,750
$2,500
$500
$1,500
$1,000
$2.50
$1.25
$0
$6
$3
$0
$5
$2.50
$0
$2.25
$0.15
$0.20
$5.40
$0.35
$0.50
$4.50
$0.30
$0.40
$0
$0
$0
$0.20
$0
$0.50
$0
$0.40
$0
$1.25
$3
$2.50
e
,_",\1637 ;mpad
1m< -
,,,,,n,d,,,,,,,,
ssplb;ll1
O.d"'"
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BILL
No.
37-16
Tax per Dwelling Unit
Q!
per Square
Foot
of Gross
Floor Area (GFA}
Land
-
Use
Red Policy
Areas
{Metro
Stations}
Orange
Policy
Areas
Yellow
Policy
Areas
Green
Policy
Areas
Residential
Uses
SF Detached
MF Residential
SF
-
Attached
$2~552
$3~653
$10~959
$18~266
$29~225
$7~656
$12~759
$11~562
$20A15
$18A99
Garden
A12artments
High
=
Rise
A12artments
~lllti-Famil)l
$2,312
$6,937
$1,652
$4~955
$8,259
$13,214
$661
$1,982
$3~303
$5,286
Senior
Commercial
Uses
Office
Indllstrial
Bioscience
Retail
Place of
Worshi12
$10.08
$5.01
$0.00
$8.97
$0.53
$13.45
$6.69
$0.00
$11.96
$0.70
$16.81
$8.36
$0.00
$14.95
$0.88
$16.81
$8.36
$0.00
$14.95
$0.88
e
"""'011637 ;mpad
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10._
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BILL
No. 37-16
Private School
HosQital
Social Service
Agencies
Other Non-
Residential
204
205
206
207
]]
$0.80
$0.00
$0.00
$1.06
$0.00
$0.00
$1.33
$0.00
$0.00
$1.33
$0.00
$0.00
$5.02
$6.69
$8.36
$8.36
(b)
For any development located in the White Flint Impact Tax District, the
tax rates are $0. [[:
Tax per Dwelling Unit or per Square Foot of Gross Floor Area (GFA)
Building Type
White Flint
High-rise residential (per dwelling unit)
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)
Building Type
$ 0
$ 0
$ 0
$ 0
$ 0
$ 0
White Flint
Tax per Dwelling Unit or per Square Foot of Gross Floor Area (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)
209
210
]]
$ 0
$ 0
$ 0
$ 0
(c)
[Any development that receives approval of a preliminary plan of
subdivision under any Alternative Review Procedure must pay the tax at
211
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No. 37-16
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214
215
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220
221
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double the rate listed in subsection (a). However, any development
approved under an Alternative Review Procedure that is located in a
Metro Station Policy Area must pay the tax at 75% of the rate listed in
subsection (a) for the same type of development in the General district.
(
d)]
Any Productivity Housing unit, as defined in Section 25B-l 7
G),
must pay
the tax at 50% of the applicable rate calculated in subsection (a).
[(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]] established under this Section.
[(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]] [[January 1]] 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
231
232
233
234
235
236
237
238
52-~O.
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
ofthis adjustment not later than [[May 1]] [[November 1]] May 1 of each
[[odd]] [[even numbered]] odd-numbered year.
Use of impact tax funds.
Impact tax funds may be used for any:
(a)
new road, widening of an existing road, or total reconstruction of all or
part of an existing road required as part of widening of an existing road,
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No.
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250
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257
that adds highway or intersection capacity or improves transit service or
bicycle commuting, such as bus lanes or bike lanes;
(b)
(c)
(d)
(e)
new or expanded transit center or park-and-ride lot;
bus added to the Ride-On bus fleet, but not a replacement bus;
new bus shelter, but not a replacement bus shelter;
hiker-biker trail
[[ill:
other bike facility]] and protected bike lanes used
primarily for transportation;
(f)
(g)
bicycle locker that holds at least 8 bicycles;
bikesharing station (including bicycles) approved by the Department of
Transportation; [[or]]
(h)
sidewalk connector in a public right-of-way to or within a major activity
center or along an arterial or major highway; or
(i)
[[the operating expenses of any transit or trip reduction program]]
element of bus rapid transit. including exclusive bus lanes. shelters. and
buses.
52-51. [[Transportation Mitigation Payment]] Reserved.
[[(a)
In
addition to the tax due under this Article, an applicant for a building
permit for any building on which an impact tax is imposed under this
Article must pay to the Department ofFinance a [Transportation] Transit
Accessibility Mitigation Payment if that building was included in a
preliminary plan of subdivision that was approved under the
Transportation Mitigation Payment provisions in the County Subdivision
Staging Policy adopted on __.]]
[[(b) The amount of the Payment [for each building must be calculated by
multiplying the Payment rate by the total peak hour trips generated by the
development] is based upon the latest fmding of adequacy for transit
accessibility for each Policy Area as approved and applicable under the
258
259
260
261
262
263
264
265
e
"_"'"637
"'pact "'" -
ame""""'' ' """,,"
0._
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No. 37-16
266
267
268
Policy Area
County Subdivision Staging Policy process.
applicability and adequacy as adopted on
The initial [mdings of
are as follows:)) [.] [[
Transit
Accessibility
Mitigation
Red Group
Bethesda CBD
Friendship Heights
Grosvenor
Glenmont
Rockville Town Center
Shady Grove Metro Station
Silver Spring CBD
Twinbrook
WheatonCBD
White Flint
Orange Group
Bethesda/Cheyy Chase
Clarksburg
Derwood
Gaithersburg City
Germantown Town Center
KensingtonlWheaton
North Bethesda
R&D Village
Rockville City
Silver SpringfTakoma
Park
WhiteOak
Yellow Group
Aspen Hill
Cloverly
Fairland/Colesville
Germantown East
Germantown West
Montgomea Village/Airpark
North Potomac
Olney
Potomac
Green Group
Damascus
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Adeguate
Inadeguate, Full Mitigation
Inadeguate, Partial Mitigation
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Inadeguate,
Full
Mitigation
Adeguate
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Inadeguate, Partial Mitigation
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Adeguate
Inadeguate, Full Mitigation
Inadeguate, Full Mitigation
Adeguate
Exempt
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No.
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270
271
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273
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275
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277
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280
281
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283
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285
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287
288
289
290
291
292
[[(
e)
In
addition to the above, buildings in the Chevy Chase Lake, Langley
Park, and Takoma/Langley Policy Areas are considered to have adequate
transit accessibility as
~
result of programmed construction funds for the
Purple Line.]]
[[(c) The Transit Accessibility Mitigation Payment is based upon
~
percentage
of the tax due under this Article according to the following schedule:
ill
ill
Full Mitigation Required 25% oftax due under this Article; and
Partial Mitigation Required
=
15% of tax due under this Article.
=
The rate must be set by Council resolution, including a resolution that
amends the Subdivision Staging Policy.]] [The Director ofFinance must
adjust the then-applicable Payment rate as ofJuly 1 of2015 and each later
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 to the nearest multiple of $10. The Director must
publish the amount of this adjustment in the County Register not later
than May 1 of each odd numbered year. The Council by resolution, after
a public hearing advertised at least 15 days in advance, may increase or
decrease the Payment rate or set different rates for different types of
development.]
[[(d) The Payment must be paid at the same time and in the same manner as
the tax under this Article, and is subject to all provisions of this Article
for administering and collecting the tax.]]
The Department ofFinance must retain funds collected under this Section
in an account to be appropriated for transportation improvements that
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BILL
No.
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294
295
296
297
298
result in added transportation capacity in the area where the development
for which the funds were paid is located.]]
52-52. Definitions.
In
this Article all terms defmed in Section 52-39 have the same meanings, and
the following terms have the following meanings:
Cost ora student seat
means the construction cost of a school. not including the
cost of land acquisition. divided by the program capacity ofthe school.
299
300
Development impact tax for public school improvements
means a tax imposed
to defray a portion ofthe costs associated with public school improvements that
are necessary to accommodate the enrollment generated by the development.
301
302
303
High-rise unit
means any dwelling unit located in a multifamily residential or
mixed-use building that is taller than 4 stories. and any I-bedroom garden
apartment.
304
305
306
Public school improvement
means any capital project of the Montgomery
County Public Schools that adds to the number of teaching stations in a public
school.
307
308
309
[[High-rise unit
includes any dwelling unit located in a multifamily residential
or mixed-use building that is taller than 4 stories, and any I-bedroom garden
apartment.]]
310
311
312
313
314
315
316
317
318
52-54. Imposition and applicability of tax.
*
(c)
*
*
[[A
portion of the development impact tax equal to 10% of the cost of
~
student seat must be dedicated to land acquisition for new schools.
@]]
The tax under this Article must not be imposed on:
(I)
any Moderately Priced Dwelling Unit built under Chapter 25A or
any similar program enacted by either Gaithersburg or Rockville;
(0
tllawlb;"\1637 ;",..,
Im<.
amendme"1s
",\bill 10._
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BILL
No. 37-16
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320
321
322
323
324
325
326
327
328
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330
331
332
333
334
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337
(2)
any other dwelling unit built under a government regulation or
binding agreement that limits for at least 15 years the price or rent
charged for the unit in order to make the unit affordable to
households earning equal to or less than 60% of the area median
income, adjusted for family size;
(3)
any Personal Living Quarters unit built under Sec. 59-A-6.15,
which meets the price or rent eligibility standards for a moderately
priced dwelling unit under Chapter 25A;
(4)
any dwelling unit in an Opportunity Housing Proj ect built under
Sections 56-28 through 56-32, which meets the price or rent
eligibility standards for a moderately priced dwelling unit under
Chapter 25A;
(5)
any non-exempt dwelling unit in a development in which at least
25% ofthe dwelling units are exempt under paragraph (1), (2), (3),
or (4), or any combination ofthem;
[[and]]
(6)
any development located in an enterprise zone designated by the
State or in an area previously designated as an enterprise zone; or
[[based upon the length oftime since the expiration ofits enterprise
zone status. Within
1
year of its expiration,
~
full exemption must
338
339
340
341
342
343
344
345
apply. Within
2
years
of its expiration, 25% of the applicable
development impact tax must apply. Within
J.
years, 50% of the
applicable development impact tax must apply. Within
1:
years,
75% of ·the applicable development impact tax must apply. A
project within an area previously designated as an enterprise zone
must be required
to
!mY
100% of the applicable development
impact tax for public school improvements beginning
1:
years after
its expiration]]
8
t.'lawIb'.11637Impact
tax -
,mon'''''''''
"'I>\b;'
10.'''''''
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BILL
No. 37-16
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347
348
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362
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366
367
368
369
370
371
ill
a house built by high school students under a program operated by
the Montgomery County Board of Education.
[(d)]
[[Uti]]
@
(I)
The tax under this Article does not apply to:
any reconstruction or alteration of an existing building or part of a
building that does not increase the number of dwelling units ofthe
building;
(2)
any ancillary building in a residential development that:
(A)
does not increase the number of dwelling units in that
development; and
(B)
is used only by residents of that development and their
guests, and is not open to the public; and
(3)
any building that replaces an existing building on the same site or
in the same project (as approved by the Planning Board or the
equivalent body in Rockville or Gaithersburg) to the extent of the
number of dwelling units ofthe previous building, if:
(A)
construction begins within one year after demolition or
destruction of the previous building was substantially
completed; or
(B)
the previous building is demolished or destroyed, after the
replacement building is built, by a date specified in a
phasing plan approved by the Planning Board or equivalent
body.
However, if in either case the tax that would be due on the new,
reconstructed, or altered building is greater than the
tax
that would have
been due on the previous building if it were taxed at the same time, the
applicant must pay the difference between those amounts.
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No. 37-16
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[(e)]
[[ill]]
W
If the type of proposed development cannot be categorized
under the residential definitions in Section 52-39 and 52-52, the
Department must use the rate assigned to the type of residential
development which generates the most similar school enrollment
characteristics.
ill
A Clergy House must pay the impact tax rate that applies to a place of
worship under Section 52-4lCd) ifthe house:
ill
ill
is on the same lot or parcel. adjacent to. or confronting the property
on which the place of worship is located: and
is incidental and subordinate to the principal building used by the
religious organization as its place of worship.
The place of worship tax rate does not apply to any portion of a Clergy
House that is nonresidential development.
52-55. Tax rates.
(a)
The Council must establish the Countywide rates for the tax under this
Article by resolution after a public hearing advertised at least 15 days in
advance. [[are:
Dwelling type
Single-family detached
Single-family attached
Multifamily (except high-rise)
High-rise
Multifamily senior
390
391
392
393
]]
Tax per dwelling unit
[$8000] $18,878
[$6000] $19,643
[$4000] $15,507
[$1600] $5,570
$
0
(b)
The tax on any single-family detached or attached dwelling unit must be
increased by $2 for each square foot ofgross floor area that exceeds 3,500
square feet, to a maximum of 8,500 square feet.
f:\law\bills\1637 impact tax - amendments ssp\bill1 O.docx
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BILL No. 37-16
394
395
396
397
398
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401
402
403
404
405
406
407
408
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410
411
412
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414
415
416
417
418
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420
(c)
Any Productivity Housing unit, as defined in Section 25B-l 70), must pay
the tax at 50% ofthe otherwise applicable rate.
(d)
[Any non-exempt dwelling unit located in a development where at least
30% of the dwelling units are exempt from this tax under Section 52­
54(c)(1)-(4) must pay the tax at 50% of the applicable rate in subsection
(a).]
[(e)]
@
The County Council by resolution, after a public hearing
advertised at least 15 days in advance, may increase or decrease the rates
[[
set in]] established under this Section.
[(f)]
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 effective on [[July 1]] [[January 1]] July 1 of each
[odd-numbered]
[[even-numbered]]
odd-numbered
year[[~
or on
November 15,]] in accordance with the update to the Subdivision Staging
Policy using the latest student generation rates and school construction
cost data [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 one
dollar[[~
except that the rate must not be increased or
decreased more than 5%]]. The Director must publish the amount ofthis
adjustment not later than [[May 1]] [[November
1]]
May 1 of each [odd
numbered] [[even-numbered]] odd-numbered year.
52-56. Accounting; use of funds.
*
(
d)
*
*
Revenues raised under this Article may be used to fund planning design.
acquisition of land. site improvements. utilitv relocation. construction.
and initial furniture and equipment for any:
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No. 37-16
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447
(1 )
new public elementary or secondary school;
addition to an existing public elementary or secondary school that
adds one or more teaching stations;
[or]
or
(2)
(3)
modernization of an existing public elementary or secondary
school to the extent that the modernization adds one or more
teaching stations[[;. or
ill
acquisition of land for
~
public elementary or secondary school]].
[[W
Any ftmds collected for the acquisition of land must be placed in the
MCPS Advance Land Acquisition Revolving Fund
(ALARF),
to be used
for the purchase ofproperty for new public schools.]]
52-58. Credits.
(a)
Section 52-47 does not apply to the tax under this Article. A property
owner must receive a credit for constructing or contributing to an
improvement ofthe type listed in Section 52-56(d), including costs of site
preparation.
[A
credit must not be allowed for the cost of any land
dedicated for school use, including any land on which the property owner
constructs a school] A property owner may receive credit for land
dedicated for
~
school site, if:
ill
the density calculated for the dedication area is excluded from the
density calculation for the development site; and
ill
(b)
the Montgomery County School Board agrees to the site
dedication.
If the property owner elects to make a qualified improvement or
dedication, the owner must enter into an agreement with the Director of
Permitting Services, or receive a development approval based on making
the improvement, before any building permit is issued. The agreement
or development approval must contain:
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BILL
No.
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472
(1)
the estimated cost of the improvement or the fair market value of
the dedicated land, if known then;
(2)
the dates or triggering actions to start and, ifknown then, fInish the
improvement or land transfer; [.]
(3)
a requirement that the property owner complete the improvement
according to Montgomery County Public Schools
and
standards~
[,]
(4)
(c)
such other terms and conditions as MCPS fmds necessary.
MCPS must:
(1)
(2)
(3)
review the improvement plan or dedication; [,]
verify costs or land value and time
schedules~
[,]
determine whether the improvement IS a public . school
improvement of the type listed in Section 52-56(d) or meets the
dedication requirements in subsection
fru;. [,]
(4)
determine the amount of the credit for the improvement or
dedication; [,] and
(5)
certify the amount of the credit to the Department of Permitting
Services before that Department or a municipality issues any
building permit.
*
(e)
(1 )
*
*
A property owner must receIve a credit for constructing or
contributing to the cost of building a new single family residence
that meets Level
I
Accessibility Standards, as defined in Section
52-107(a).
(2)
The credit allowed under this Section must be as follows:
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No. 37-16
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482
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491
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493
494
495
496
497
498
499
(g)
(f)
(4)
(3)
(A)
If at least 5% of the single family residences built in the
project meet Level I Accessibility Standards, then the owner
must receive a credit of [[$500]] $250 per residence.
(B)
If at least 10% of the single family residences built in the
project meet Level I Accessibility Standards, then the owner
must receive a credit of [[$1,000]] $500 per residence.
(C)
If at least 25% of the single family residences built in the
project meet Level I Accessibility Standards, then the owner
must receive a credit of [[$1,500]] $750 per residence.
(D)
If at least 30% of the single family residences built in the
project meet Level I Accessibility Standards, then the owner
must receive a credit of [[$2,000]] $1.000 per residence.
Application for the credit and administration of the credit be in
accordance with Subsections 52-107(e) and (f).
A person must not receive a property
tax
credit under this Section
if the person receives any public benefit points for constructing
units with accessibility features under Chapter 59.
The Director of Finance must not provide a refund for a credit which is
greater than the applicable tax.
Any credit issued under this Section before December 31, 2015 expires 6
years after: the Director certifies the credit. Any credit issued under this
Section on or after January 1, 2016 expires 12 years after the Director
certifies the credit.
!hl
After a credit has been certified lUlder this Section. the property owner or
contract purchaser to whom the credit was certified may transfer all or
part of the credit to any successor in interest of the same property.
However. any credit transferred under this subsection must only be
~
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BILL
No. 37-16
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applied to the tax due under this Article with respect to the property for
which the credit was originally certified.
52-59. [[School Facilities Payment]] Reserved.
[[(a)
In
addition to the tax due under this Article, an applicant for a building
pennit for any building on which a tax is imposed under this Article must
pay to the Department of Finance a School Facilities Payment if that
building was included in a preliminary plan of subdivision that was
approved under the School Facilities Payment provisions in the County
Subdivision Staging Policy.]]
[[(b) The amount of the Payment for each building must
be
calculated by
multiplying the Payment rate by the latest per-unit student yield ratio for
any level of school or individual school found to be inadequate for the
purposes of imposing the School Facilities Payment in the applicable
Subdivision Staging Policy and for that type of dwelling unit and
geographic area issued by MCPS.]]
[[(c) The Payment rates must be set by Council resolution. The Director of
Finance must adjust the then-applicable Payment rates]] [as ofl [[on July
1 ofl] [2015 and] [[each]] [later odd- numbered] [[even-numbered]]
[[odd-numbered year, or on November 15, in accordance with the update
to the Subdivision Staging Policy
by
using the latest student generation
rates and school construction cost data. The Director must calculate the
adjustment to the nearest multiple of one dollar.]]
[based on the
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construction cost ofa student seat for each school level as certified by the
Superintendent of Montgomery County Public Schools for the two most
recent calendar years, to the nearest multiple of$10.] [[The Director must
publish the amount of this adjustment in the County Register not later
than May 1 of each]] [odd numbered] [[even-numbered]] [[odd­
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numbered year.
The Council by resolution, after a public hearing
advertised at least 15 days in advance, may increase or decrease the
Payment rate or set different rates for different types of housing unit.]]
[[The Council must not increase or decrease the rate
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more than 5%.]]
[[(d) The Payment must be paid at the same time and in the same manner as
~e
tax under this Article, and is subject to all provisions of this Article
for administering and collecting the tax.]]
[[(e) The Department ofFinance must retain funds collected under this Section
in an account to be appropriated for MCPS capital improvements that
result in added student capacity for, to the extent possible, the affected
grade level in the school cluster, or, if no cluster is established, another
geographic administrative area, where the development for which the
funds were paid is located.]]
Sec. 2. Effective date; Transition.
This Act takes effect on March 1. 2017. The. amendments to the development
impact tax for transportation improvements and the development impact tax for public
school improvements added by Section 1 ofthis Act. must apply to any application for
a building permit filed on or after March 1. 2017. A property owner who applies for
subdivision approval before January I. 2017 must pay a transportation mitigation
payment and a school facilities payment at rates the Council establishes by resolution.
after a public hearing advertised at least 15 days in advance. unless the property owner
applies for a building permit on or after March 1, 2017.
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Approved:
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Nancy Floreen, President, County Council
Date