AGENDA ITEM 8
June 21, 2016
Public Hearing
MEMORANDUM
June 17,2016
TO:
FROM:
SUBJECT:
County Council
Amanda Mihill, Legislative
Attomeyd'n~
Public Hearing:
Expedited Bill 21-16, Property Tax Credit - Burtonsville
Enterprise Zone Property - Personal Property
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 Government Operations and Fiscal Policy
Committee worksession is tentatively scheduled for June 30 at 9:30 a.m.
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.
This packet contains:
Expedited Bill 21-16
Legislative Request Report
Fiscal and Economic Impact statement
Circle
#
1
3
4
F:\LA
W\B
ILLS\1621 Burtonsville Enterprise Zone Property\PH Memo.Docx
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill No.
21 16
Concerning: Property Tax Credit -
Burtonsville Enterprise Zone Property
- Personal Property
Draft No. 2
Revised:
5/11/2015
Introduced:
May 17, 2016
Expires:
November 17! 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _-:-:--:---:-:-:-:-_ _ __
Effective:
July 1! 2016
Sunset Date:
-!.!N~on~e,,--
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
w
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Hucker
CowSponsors: Councilmember EIrich
and
Navarro
AN EXPEDITED ACT
to:
(1)
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 underlinina
[[Double boldface brackets]]
* *
*
Heading or defined term.
Addedto 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:
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL No.
21-16
1
Sec.
1.
Section 52-108 is amended as follows:
52-108. Burtonsville Enterprise Zone Property.
(a)
Definitions.
In
this Section, the following words have the meanings
indicated:
Qualified property
means real property that:
2
3
4
5
6
7
(l) 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.
(b)
Credit.
(l)
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
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
mJ
personal property owned
by
an eligible business entity
located on qualified property.
25
26
Sec. 2. Expedited Effective Date.
The Council declares that this legislation is necessary for the immediate
protection ofthe public interest. This Act takes effect July 1,2016.
27
28
o
f:\law\bills\1621 burtonsville enterprise zone property\bill2.doc
 PDF to HTML - Convert PDF files to HTML files
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
NtA
WITIDN
MUNICIPALITIES:
PENAL TIES:
Nt
A
F:\LAW\BILLS\1621 Burtonsville Enterprise Zone Property\LRR.Docx
 PDF to HTML - Convert PDF files to HTML files
ROCKVILLE,
MA.R:YIA~D
MEMORANDUM
June 6, 2016
TO;
Nancy Floreen, President, County Council
Jennifer A. Hughes, Director, office
of
Management and Budg
Joseph F. Beach, Director. Department
ofFinan~
FEiS for Bill 21-16E, Property Tax Credit - Burtonsville Enterprise Zone
Property - Personal Property
FROM:
SUBJECT:
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:fz
cc:
Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices
of
the
County
Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Infonnation Office
Joseph F. Beach, Directpr, Department ofFinance
David Platt, Department of Finance
Jane Mukira, Office of Management and Budget
Alex Espinosa, Office of Management and Budget
Naeem Mia. Office ofManagement and Budget
 PDF to HTML - Convert PDF files to HTML files
Fiscal Impact Statement
Bill 21-16E,
Property
Tax Credit - Burtonsville Enterprise Zone
Property­
Personal Property
1.
Legislative Summary:
This legislation amends Section 52-108(b)
(1)
to authorize a credit on personal property
owned by an eligible business entity located on qualified property> Bill 21-16E amends
the definition ofqualified property in Section 52-1 08(a)(3) as real property that "is
improved after
the
effective
date
oHhis
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 wbether
tbe 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
ofFinance (Finance). Treasury extracted personal property data for levy years 2014 and
2015. However, 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
personal property tax accounts. Second, Treasury dctcnnined 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
detennined that 19 accounts had an increase in personal property assessments between
levy year 2014 (FY20 15) and levy year 2015 (FY2016) 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 assessments for those accounts currently
eligible for the credit
will
increase at an average annual rate of 1.1 percent per year and
no change to the personal property tax rate.
FY20l7: $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
atIect 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.
 PDF to HTML - Convert PDF files to HTML files
Not applicable
6.
Later actions that may affect future revenue and expenditures
if
the
bill
authorizes
future spending.
Not applicable
7. An
estimate of the staff time needed to implement the
bill.
No additional staff time is needed
to
implement Bill 21-16E.
8.
An explanation of how the addition of
new
staff responsibilities 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 the 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
811
increase in assessed
values~
and the personal property
ta.'\
rate.
11.
Ranges of revenue or expenditures tbat 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, why that is the ease.
Bill 21-l6E 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 Hagedoom, Department of Finance
Jane Mukira, Office of Management and Budget
 PDF to HTML - Convert PDF files to HTML files
Economic Impact Statement
Bill2h16E
t
Property Tax Credit-
Burtonsville
Enterprise Zooe Property­
Personal Pro.perty
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~
1GE
amends the definition of
qual
ified property in Section 52-1 08(a)(3) as real property that
"is improved after the effective date of this Bill and before January 1,2002
or another
date provided in
Section
9-317
ofthe
Tax-Property Article."
1. The sources 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
lev'}'
years 2014 and 2015. However,
since
Burtonsville Enterprise Zone (EZ) is located in
the largest
generalla::~.
class, Treasury matched
mailing
ad,iresses for real property
tax
accounts
in
the EZ to personal property
tax
accounts. .Second, Treasury determined
which personal property account.; 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 determined
that
19 accounts had
an
increase in
personal property
a~sessments
between
levy year 2014 and
le-vy
year 2015 and
therefore eligible for the credit. Bac;ed
011
that data and the personal property tax rate,
Treasury estimates the total amount ofthe credit
in
le\'Y year 2015 is approximately
$9,000.
2. A description of
any
variable
that could affect the
economic
impact
estimates.
Based on the methodology presented in paragraph 1, the v-driables 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 of
accountc;
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
credit of $9,000
in
levy year 2015, Bill 21­
16E v..i11 have no significant impact on County's employment, spending, savings,
investment, incomes, and property values.
4.
If
a BiU
is
likely to have no economic impact, why
is
that the case?
Bil121-16E would
likely
have no significant impact. .Please see paragraph 3.
Page I of2
 PDF to HTML - Convert PDF files to HTML files
Economic Impact Statement
Bill 21-16E, PropertY Tax Credit -Burtonsville Enterprise Zone Property ­
Personal Property
5. The following contributed to or concurred witb tbis analysis: David
Platt,
.Michael
Coveyou, and Robert Hage.doorn, Finance.
Jos
F.. each) Director
Department of Finance
DatJ·
Page 2
of2