Agenda Item 9
September 20,2016
Public Hearing
MEMORANDUM
September 16,2016
TO:
County Council
FROM:
Robert H.
Drummer,
Senior Legislative
Atklme~
SUBJECT:
Public Hearing:
Bill 31-16, Taxation - Urban Agricultural Tax Credit ­
Established
Bill 31-16, Taxation - Urban Agricultural Tax Credit - Established, sponsored by Lead
Sponsor Councilmember Hucker, was introduced on August 2,2016. A Government Operations
and Fiscal Policy Committee worksession is tentatively scheduled for October 27 at 9:30 a.m.
Md. Tax-Property Code §9-253 provides that:
(b)
The Mayor and City Council of Baltimore City or the governing body of a county
or of a municipal corporation may grant, by law, a tax credit against the county or
municipal corporation property tax imposed on urban agricultural property.
Bill 31-16 would implement this authority by:
(1)
establishing an urban agricultural tax credit against real property tax;
(2) defining an urban agricultural property and an urban agricultural purpose; and
(3) establishing eligibility for an urban agricultural tax credit
Background
Bill 31-16 would define an urban agricultural property as real property that is:
(1)'
at least one-half of an acre and not more than 5 acres;
(2) located in a priority funding area, as defined in Md. State Finance and Procurement
Code §5-7B-02; and
(3) used for urban agricultural purposes.
The Bill would define an urban agricultural purpose as:
(1)
crop production activities, including the use of mulch or cover crops to ensure
maximum productivity and minimize runoff and weed production;
(2) environmental mitigation activities, including stormwater abatement and
groundwater protection;
(3) community development activities, including recreational activities, food
donations, and food preparation and canning classes;
(4) economic development activities, including employment and training
opportunities, and direct sales to restaurants and institutions; and
(5) temporary produce stands used for the sale of produce raised on the premises.
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A property owner must conduct at least 2 urban agricultural purposes on the property. The
term of the credit would be 5 years. The credit would equal the property tax otherwise due on the
property.
The County Attorney's Office reviewed the Bill and made some suggested amendments to
clarify the intent. See the County Attorney's Bill Review Memorandum at ©9-11.
This packet contains:
Bi1l31-16
Legislative Request Report
Md. Tax-Property Code §9-253
County Attorney Bill Review Memorandum
Circle #
1
5
6
9
F:\LAW\8ILLS\I 631 Urban Agricultural Tax Credit\PH Memo.Docx
2
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Bill No.
31-16
Concerning: Taxation
Urban
Agricultural Tax Credit - Established
Revised: August 15, 2016 Draft No.
L
Introduced:
August 2,2016
Expires:
Februarv 2, 2018
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
_N!..!:o~n.!!::e'___
_ _ _ _ __
Ch, _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Hucker and Co-Sponsor: Councilmember EIrich
AN
ACT to:
(1)
(2)
(3)
(4)
establish an urban agricultural tax credit against real property tax;
define an urban agricultural property and an urban agricultural purpose;
establish eligibility for an urban agricultural tax credit; and
generally amend the law governing urban agricultural tax credits.
By adding
Montgomery County Code
Chapter 52, Taxation
Section 52-110
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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BILL No. 31-16
1
2
Sec.
1.
Section
52-lID
is added as follows:
52-ltD.
Urban Agricultural Tax Credit.
(ill
Definitions.
In this Section:
Urban agricultural property
means real property that is:
3
4
5
6
7
8
ill
ill
ill
ill
at least one-half of an acre and not more than
~
acres;
located in
~
priority funding area, as defined in Md. State Finance
and Procurement Code §5-7B-02; and
used for urban agricultural purposes.
9
10
11
Urban agricultural purposes
means:
crop production activities, including the use of mulch or cover
crops to ensure maximum productivity and minimize runoff and
weed production;
12
13
ill
ill
environmental
mitigation
activities,
including
stormwater
14
15
16
17
18
19
abatement and groundwater protection;
community
development
activities,
including
recreational
activities, food donations, and food preparation and canning
classes;
ill
economIC development activities, including employment and
training opportunities, and direct sales to restaurants and
institutions; and
20
21
22
ill
temporary produce stands used for the sale of produce raised on
the premises.
23
24
ili)
Credit required.
The Director of Finance must allow each eligible
taxpayer
~
credit against County real property taxes due in each tax year
in which the taxpayer is eligible for the credit.
(£)
Eligibility.
An
eligible taxpayer must conduct at least
~
urban agricultural
25
26
27
purposes on urban agricultural property. The property must be used
Q
f:\law\bills\1631 urban agricultural tax credit\bill3.docx
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BILL No. 31-16
28
solely for urban agricultural purposes, except an individual engaged in
crop production on the property may also reside on the property.
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
~
@
Amount q[credit.
The credit must equal the property tax othelWise due
on the property.
Application.
A property owner must
.illmlY
for the credit at least 90 days
before the beginning of the first year the tax credit is sought on
~
form
containing the information required by the Director. A property owner
must apply to continue the credit at least 90 days before the beginning of
each subsequent tax year.
ill
Term q[credit.
ill
ill
(g)
The term ofthe credit is
~
years, unless renewed.
A taxpayer may
mm1Y
to renew the credit no later than 90 days
It:
at any time during the term of
before the expiration ofthe credit for another
~
tax years.
Continuous agricultural use required.
the credit or the renewal of the credit, the property is no longer used for
agricultural purposes:
ill
ill
the credit granted to the property must be terminated; and
the owner ofthe property is liable for all property taxes that would
have been due during that 5-year term if the credit had not been
47
48
49
50
51
52
granted.
(h)
The Director must take all actions necessary to
mm1Y
the credit to each
eligible taxpayer who applies for the credit. A taxpayer may appeal
~
final decision by the Director denying or terminating the credit to the
Maryland Tax Court within 30 days after receiving
~
notice of denial or
termination
- - - ­
Director.
from the
(])
f:\law\bills\1631 urban agricultural tax creditlbiU3.docx
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BILL
No. 31-16
53
54
55
56
Sec. 2. Evaluation.
The Director must submit a report to the Executive and the
Council on or before January 1, 2020 evaluating the effectiveness of the tax credit in
promoting urban agricultural purposes.
Approved:
57
58
Nancy Floreen, President, County Council
Date
59
Approved:
60
Isiah Leggett, County Executive
Date
61
This is a correct copy ofCouncil action.
62
Linda M. Lauer, Clerk of the Council
Date
f:\law\bills\1631 urban agricultural tax credit\bill3.docx
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LEGISLATIVE REQUEST REPORT
Bill 31-16
Taxation
-
Urban Agricultural Tax Credit
-
Established
DESCRIPTION:
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Bill 31-16 would establish an urban agricultural
tax
credit against
real property tax.
Using property for urban agricultural purposes is becoming less
common in the County.
Encourage urban agricultural purposes in the County.
Finance, County Attorney
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, Senior Legislative Attorney
To be researched.
None.
F:\LAw\BILLS\I631 Urban Agricultural Tax Credit\LRR.Docx
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§
9-253. Urban agricultural property; tax credits, MD TAX PROPERTY
§
9-253
I
West's Annotated Code of Maryland
I
Tax-Property
I
Title 9. Property Tax Credits and Property Tax Relief
I
Subtitle
2.
Statewide Optional
MD Code, Tax - Property,
§
9-253
§
9-253. Urban agricultural property; tax credits
Effective: June
1, 2014
Currentness
(a)(1) In this section the following words have the meanings indicated.
(2) "Urban agricultural property" means real property that is:
(i)
at least one-eighth of an acre and not more than 5 acres;
(ii) located in a priority funding area, as defined in
§
5-78-02
of the State Finance and Procurement Article; and
(iii) used for urban agricultural purposes.
(3) "Urban agricultural purposes" means:
(i) crop production activities, including the use of mulch or cover crops to ensure maximum productivity and minimize
runoff and weed production;
(ii) environmental mitigation activities, including stonnwater abatement and groundwater protection;
(iii) community development activities, including recreational activities, food donations, and food preparation and canning
classes;
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© 2016
Ti!(";\SCfi
R2uter~c
No
c'(~im
to
ol-i~:ina!
U.8, Gcvernmert
Vvorks,
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§
9-253. Urban agricultural property; tax credits, MD TAX PROPERTY
§
9-253
(iv) economic development activities, including employment and training opportunities, and direct sales to restaurants and
institutions; and
(v) temporary produce stands used for the sale of produce raised on the premises.
(b) The Mayor and City Council of Baltimore City or the governing body of a county or of a municipal corporation may grant,
by law, a tax credit against the county or municipal corporation property tax imposed on urban agricultural property.
(c)(I) Except as provided in paragraph (2) of this subsection, a tax credit under this section shall be granted for 5 years .
. (2)(i) Ifthe Mayor and City Council of Baltimore City or the governing body ofa county or ofa municipal corporation grants
a tax credit under this section, the jurisdiction granting a
tax
credit shall evaluate the effectiveness ofthe credit after 3 years.
(ii)
If the jurisdiction granting the
tax
credit determines that the
tax
credit is ineffective in promoting urban agricultural
purposes, the jurisdiction granting a tax credit may terminate the tax credit.
(iii) The jurisdiction granting a tax credit under this section may extend the tax credit for an additional 5 years.
(d) The Mayor and City Council of Baltimore City or the governing body of a county or of a municipal corporation may
provide, by law, for:
(1) the amount of the tax credit under this section;
(2) additional eligibility criteria for the tax credit under this section;
(3) regulations and procedures for the application and uniform processing of requests for the
tax
credit; and
(4) any other provision necessary to carry out the credit under this section.
(e) At any time during the period for which a property
tax
credit under this section is granted for urban agricultural property, if
.~~-
WEsn.AW
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2
2016
Thc!llscJn
Reuters. No
clai'Tl
[ci
origllla!
U.S. Government Works.
(jJ
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§
9-253. Urban agricultural property;
tax
credits, MD TAX PROPERTY
§
9-253
the property ceases to be used for urban agricultural purposes, the owner of the property shall be liable for all property taxes
that would have been imposed if a property
tax
credit for urban agricultural property had not been granted.
Credits
Added by Acts 2010, c. 721,
§
1, eff. June 1,2010. Amended by Acts 2013, c. 660,
§
1, eff. June 1,2013; Acts 2014, c. 390,
§
1, eff. June 1,2014.
MD Code, Tax - Property,
§
9-253, MD TAX PROPERTY
§
9-253
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3
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lsjah
Leggett
COpnIJExe¢1l
t
iv¢
Marc
P;
Hansen
Cd~htyAtr(Jtney
Al¢:X@Il4reA.;espfuq~,
Dlregt()l"
·Depattirient·bf.Finartce
=l\~l~:mC:i~-'~.
~i~~j:~~~n;=:;a~~t~~~~~ent ~.
"
,(>ATE;
A\J~l,lst·10
•.4(U6·
RE:
Bill
3J~16,
l'axmlon
-tJfQ.~Ag:dc\llt\lJ;1lJ
tax
Grc;djt ..
Esta.t>]islI¢d
Ihav~r¢vi~w¢<1
sm·
31-16.
T~t1tiori.,...
(JrbanAgn.ctilfural
TaxCted.i.t-Establislied.
'111is
bHlcreatesanill:1)anagr1cuitural
teal propettytaJc
c~tf¢rCQuntyrea,lproPertYJ~x¢s.
time.
if
the property
is
ti~
longerusedf6iuroanagncultutal
pUl'pOses,or
is no
Jongereligibleror
thecreditdurlllg
that
.fivc-yearperiocf.
.
.'
=~~:=r$?J~!e:~fur¢=a~JSi~=
lhave several
commentsconcertling thetIuc
credit
bilL
Themxcredit istteated pursuant
toanenahlii1gS~teb:lWin
Seqtion
9~253oftheTax­
Piop~yArti¢le,dnlle
Annotated COde
of
Maryland.
I.
First;
utlderthedefinitions sect;ionofwban
agrioUltUral
p~~~
it
is
difficult to
detennineiftlre.sepprpose$oanbe
consicieredirtdividually.orpropcrty must comply \vithall of
the.purpo~stp
qtial1fyfurthecredit;because
between No.4
and 5
there ism.
"f:ln(:l/;
Ilielieve
this
wt)rdshotUd1Je'\')r;."
23,
it
ditectsthe
Director
of
Finance
to allpweach
eligible
IaXpaycra
credit
~flinstCo1.lntyrealpropertytaxes
due
ineaclttax year
ill
which
the
2.UD(lerthecreditrequir~;
line
Rockville;
.Maryland
20850.258Q
... _ _._-.-.....­
(140)
177-67951TD{240}717~2'54S
PA1C(240)
717
-f,705 -scotlfoncannon@mlintgomeryc()um)'ind,gdv
lQl
M(lt1i'()C~
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··Alexa,ndre.AEspi1lQ~
August 1l,2{}16
Page
2
'.r~~~tn!~:~~t:~~:t::;:!:j~:~:~:~~~~:J::e.land
:ot} 'a!so,the'
::£1:~Sa:~~~:;:=::i:~ii!t:ia:::~~~!::&:::!:~~l!:~'Q~::~$
.
npt an entity.
:J~===~~=~==i!;
bilI
referS to an
"indlviduatengagedin
ctopprociu<rliQn",
\wip'b.typicaJ1y
4¢xtqt~a,hq.ttl~
be
i
l1g,
.'. ' .
..
'.
'
5.
. . f
would recuouneD,&the.
.fol1owj1)g~endOlentsto
Bill 31-16
to
help
claJilY
the
hill
..
and. make
it
consistentWith
State
law~
.
,'"
",.
..
..
'.
."
. '
'.
.~."
... ...
"
'.
..
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,.-...
.
.::'.
.'
. , :
...
'.
. .
"
".
.... .
..
pLQnmr
tbat~ansed.~~tie.9 wO;ijlc:lr~d~f"Qllows;
fjrbanagricultunil
purposeS
means
."'or".
b.
Lliie20would
be:modifiedt'Pdelete
the word
'"and;'
and
add
the
wClrd
c;
SectiGlllc).begifihmgatIirte26
wouldbearnended.as .follows;
Eligihilitl:'.
12t~ibi·credit·~.e1Whleta.'{12ayermu&1·JlSe.~pmperty.t<itncondUct]]
.
atleast.~
.
Q[1b.~·
ythan agri¢uituci1purpo5es[(on
nrbanagrictiitUtai
pr(metlYn
'~.
1M.
term
.,Qf.th~£Le.dit.
.The
.' ptoper!1'mustbe,uS¢dso1elY;,.f'or'urball
agrlculturalpm.p05eS,
.excepian·
individual.engaged
'in
croppr&iuctionon~property
niayalsor¢Side
Mtheptoperty~
.
d.
Seetipn(e),
~gioning
at
line~4
would
beamcrtded.as foUo,,·s:
'creditapropcrty ownermustrumJy for the
creditatleast 90
da¥sbefate
tM1?eginnmgg
the_._ yeatthetaxcredit
~sought
on. g forrncontainii1g
the
infonnation:reQuiredhiheDirccror:
.h!~<l¥!m teceiV~ th.~ ~ai.ti
property oWncrIIlust
mtrlY
tQcontinu~the¢reditatJeast90daysbefore
thebeginIiing of
each
subsequent
!M.
year.
.
App.licaliQ.n~ m.orderUl~
e.
the words
ye~.
Section
(f)
at Jine
41
would
add
the word "ax"
between the
number
Sand
f
Se:cU(tn
(gll begint)ing atline44 would be' amended asJoIlows:
Continu6usagriculturafuse required,
...ll::t:tt.atlxtiine.duri,ng·
the
t~nJ!of'the
credit
or the
renewalQfthecredit.the~isnolon~erdi$h1efurth~
credit or
used
for2Jlrban
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~=d[t~or:Pit1~sa
~age3
~culturalfutpOse.!;;
.
attachJ:~{::.::;:eQf::b~ij;::::=~~:£:J=;:::~~li~.;r::Q~~ili:~~n
~J.lthorit:Y
()f
th~Ccn.JIl~iland
the
is
6~herwis¢l~anys:Uffi¢jetlt.
ce;
~':i;.i4::~~=~;;;:efAdministmtiVe.Officer
Bob~er,t.eg~$14tiye.AJtomey
Amanda.·Mihill;
·Legi$latiV¢Attomey
SRI'
16.OQ1149-nill~ri¢w