Sec. 52-39. Definitions.

In the event a transfer subject to the tax imposed by this article does not in fact occur after such tax has been paid and the instrument is thus not recorded as required by law with the clerk of the circuit court or the transfer is set aside by judicial decree, the director of finance shall refund the tax paid, without interest; provided, that application in a form prescribed by the director is made within six (6) months from payment of such tax, or within six (6) months from the date of the judicial decree setting aside such transfer. (Mont. Co. Code 1965, § 84-30; 2016 L.M.C., ch. 7, § 2.)

Editor’s note—Section 52-37 (formerly § 52-26 and prior to that § 84-30) is quoted and interpreted in Rapley v. Montgomery County 261 Md. 98, 274 A.2d 124 (1971).

Sec. 52-38. Penalty for violation of article.

Any person who fails, neglects or refuses to comply with the provisions of this article or any person who makes a false statement as to value of consideration or fraudulently affixes or attempts to affix to any document a forged or counterfeit impression of any receipt or stamp of the director of finance shall be subject to punishment for a class A violation as set forth in section 1-19 of chapter 1 of the County Code. (Mont. Co. Code 1965, § 84-31; 1983 L.M.C., ch. 22, § 56; 2016 L.M.C., ch. 7, § 2.)

ARTICLE IV. DEVELOPMENT IMPACT TAX FOR TRANSPORTATION IMPROVEMENTS.*

*Editor’s note—Article IV (formerly Article VII, 2016 L.M.C., ch. 7 , § 1.) The Court of Appeals in Waters Landing Limited Partnership v. Montgomery County, 337 Md. 15, 650 A.2d 712 (1994), held that the development impact tax was valid as enacted by the County Council on April 27, 1990, in Emergency Bill No. 33-90, codified in §§ 52-39—52-51 (formerly §§ 52-47—52-59, 2016 L.M.C., ch. 7 , § 1) of the County Code. This decision validated the collection of impact taxes and fees back to 1986. The Court of Appeals in Waters Landing held that the County Council had the authority to impose the development impact tax under 808, Laws of Maryland 1963; that the County Council had the authority under ch. 808 to enact a development impact tax in 1986; therefore the County Council could in 1990 correct retroactively the technical defect in the original enactment of the tax; that the development impact tax did not violate the Equal Protection Clause of the United States Constitution; and that the development impact tax is an excise tax and not a property tax. The Court of Appeals on March 7, 1990, in Eastern Diversified Properties, Inc. v. Montgomery County, 39 Md. 45, 570 A.2d 850 (1990), held that ch. 49A of the County Code imposed a tax, not a fee, and that the County Council did not have the authority to impose the tax under Art. 25A, Annotated Code of Maryland, the Express Powers Act. As a result, the County Council enacted Emergency Bill No. 33-90 reimposing the development impact fee as a tax under the authority of ch. 808, Laws of Maryland 1963, codified as § 52-17 of the County Code. The Bill stated that it intended to correct the legal defect in the initial enactment of the fee in 1986. The Bill stated that it legalized and ratified the collection of taxes under ch. 49A from July 29, 1986.

2024 L.M.C., ch. 22, § 2 states: Sec. 2. Expedited Effective Date. The Council declares that this legislation is necessary for the immediate protection of the public interest. The amendments made in Section 1 take effect on January 1, 2025, and must apply to any application for a building permit filed on or after January 1, 2025.

2021 L.M.C., ch. 2, § 1, states: Sec. 2. Effective date – Transition. This Act takes effect on February 26, 2021. The amendments in Section 1 must apply to:

(1) any application for a building permit filed on or after February 26, 2021; except for

(2) any dwelling unit in a development for which a preliminary plan application is filed prior to February 26, 2021 that includes 25% affordable units as defined in Sections 52-41(g)(1) through 52-41(g)(4) or 52-54(d)(1) through 52-54(d)(4); or

(3) any development in a former Enterprise Zone for which a preliminary plan application is filed and accepted before January 1, 2021.

2020 L.M.C., ch. 37, § 2, states: Effective date - Transition. This Act takes effect on March 9, 2021. The amendments in Section 1 must apply to:

(1) any application for a building permit filed on or after February 26, 2021; except for

(3) any development in a former Enterprise Zone for which a preliminary plan application is filed and accepted before January 1, 2021.

2011 L.M.C., ch. 19, § 2, states, in part: The payment date for the development impact tax imposed under Articles VII and XII (now Articles IV and V, 2016 L.M.C., ch. 7, § 1) of Chapter 52, as amended by Section 1 of this Act, applies to any building for which an application for a building permit is filed on or after that date. The payment date for the Transportation Mitigation Payment and School Facilities Payment, imposed respectively under Section 52-59 and 52-94 (now Sections 52-51 and 52-59, 2016 L.M.C., ch. 7, § 1), apply to any Payment required on or after that date.

2011 L.M.C., ch. 1, § 2,amended by 2013 L.M.C., ch. 4, § 3, states, in part: ... Applicability; Refunds. ... This Act takes effect on December 1, 2010, and applies to any development located in the White Flint impact tax district for which a building permit is issued on or after December 1, 2010. If any development impact tax was collected under Article VII (now Article IV, 2016 L.M.C., ch. 7, § 1) of County Code Chapter 52 before this Act took effect for any development to which this Act applies, the Director of Finance must promptly refund that tax as if a refund were due and claimed under County Code Section 52-54 (now Section 52-46, 2016 L.M.C., ch. 7, § 1).

2003 L.M.C., ch. 27, § 2, states:

(a) This Act takes effect on March 1, 2004. The development impact tax imposed under Article VII (now Article IV, 2016 L.M.C., ch. 7, § 1) of Chapter 52, as amended by Section 1 of this Act, applies to any building for which an application for a building permit is filed on or after that date.

(b) The development impact tax rates imposed under Section 52-57 (now Section 52-49, 2016 L.M.C., ch. 7, § 1), as amended by Section 1 of this Act, do not apply to any building located in a Metro Station Policy Area or Town Center Policy Area if:

(1) a site plan which includes that building was approved by vote of the County Planning Board, or the equivalent body in any municipality, before May 1, 2003; and

(2) (A) a building permit is issued for that building before September 1, 2006; or

(B) if the building is part of a mixed use project, a building permit is issued for any building or structure in that project before March 1, 2005.

Any building to which this subsection applies is liable for the tax at the rates in effect on February 29, 2004.

2002 L.M.C., ch. 4, § 2, states:

(a) This Act takes effect on July 1, 2002, and applies to any development for which an application for a building permit is filed on or after that date.

(b) Each taxpayer in the County District must pay the development impact tax at 25% of the rates set in Section 52-57 (now Section 52-49, 2016 L.M.C., ch. 7, § 1), as amended by Section 1 of this Act, for building permit applications filed between July 1, 2002 and December 31, 2002; 50% of the rates set in Section 52-57 (now Section 52-49, 2016 L.M.C., ch. 7, § 1) for building permit applications filed between January 1, 2003, and June 30, 2003; 75% of the rates set in Section 52-57 (now Section 52-49, 2016 L.M.C., ch. 7, § 1) for building permit applications filed between July 1, 2003 and December 31, 2003; and 100% of the rates set in Section 52-57 (now Section 52-49, 2016 L.M.C., ch. 7, § 1) for building permit applications filed on or after January 1, 2004. To the extent that any taxpayer pays a lower rate than that set in Section 52-57 (now Section 52-49, 2016 L.M.C., ch. 7, § 1) because this subsection applies, any credit claimed under Section 52-55 (now Section 52-47) must be reduced by the same ratio.

(1) a subdivision plan, project plan, or an equivalent development approval mechanism in Gaithersburg or Rockville, which includes that building was approved before July 1, 2002, and

(2) a building permit is issued before July 1, 2003.

Annotation to Ed. note (uncodified section of Bill): 2002 L.M.C., ch. 4, § 2(a) is quoted in F.D.R. Srour Partnership v. Montgomery County, 179 Md. App. 109, 944 A.2d 1149, cert. granted, 405 Md. 290, 950 A.2d 828 (2008).

Sec. 52-39. Definitions.

In this Article the following terms have the following meanings:

Additional capacity means a new road, adding an additional lane or turn 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, or implements or improves transit, pedestrian and bike facilities or access to non-auto modes of travel; 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 find that a specified business district street or industrial street also provides additional capacity as defined in this provision.

Additional capacity is sometimes referred to as added “highway capacity,” “transportation capacity,” or “intersection capacity”.

Adequate Public Facilities Ordinance (APFO) means Section 50-35(k).

Adequate Public Facilities Ordinance policy area transportation adequacy standards means standards by which the area-wide adequacy of transportation facilities serving a proposed development are judged. APFO policy area transportation adequacy standards do not include requirements for other on-site or off-site transportation improvements that may be separately required or standards relating to local area review which may be independently required.

Agricultural facility means a building or structure, or portion of a building or structure that is used exclusively for the storage or processing of an agricultural product to prepare the product for market and is located in the Agricultural Reserve, Rural Residential, RE-1 or RE-2 Zones.

Applicant means the property owner, or duly designated agent of the property owner, of land on which a building permit has been requested for development.

Bioscience facility means any biological research and development or manufacturing facility that substantially involves research, development or manufacturing of:

(1) biologically active molecules,

(2) devices that employ or affect biological processes,

(3) devices and software for production or management of specific biological information, or

(4) products or materials that purify or handle biologically active products;

Building permit means a building permit issued by the Department of Permitting Services under Chapter 8.

Capital improvements program (CIP) means the current adopted six-year capital improvements program.

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.

Clergy House means a single-family dwelling unit provided for the designated religious leader of a place of worship to live.

Construction means the planning, design, acquisition of land, site improvements, utility relocation, building, and initial furniture and equipment for a capital project.

Cultural institution means any privately-owned or -operated structure and land where works of art or other objects are kept and displayed, or where books, periodicals, and other reading material are offered for reading, viewing, listening, study, or reference, but not typically offered for sale. Cultural institution includes a museum, cultural or art exhibit, and library.

Demolish means to tear down or destroy an entire building or structure, or 67 percent or more of first-story exterior walls of a one-family or two-family dwelling unit. Demolish includes the conversion of an exterior wall into an interior wall. Basement and cellar walls are not considered exterior walls.

Development means the carrying out of any building activity or the making of any material change in the use of any structure or land which requires issuance of a building permit and:

(1) Increases the number of dwelling units; or

(2) Increases the gross floor area of nonresidential development.

Development impact tax means a pro rata per unit or per square foot of gross floor area tax imposed before a building permit is issued for development which is intended to defray a portion of the costs associated with impact transportation improvements that are necessary to accommodate the traffic generated by the development.

Dwelling unit means the definition given to dwelling unit by Chapter 59.

Farm tenant dwelling means a dwelling unit under the control of the owner or operator of the farm on which the dwelling unit is located and occupied by an agricultural worker actively engaged in farming 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 definition of household.

General plan refers to “On Wedges and Corridors . . . A General Plan for the Maryland- Washington Regional District,” as amended, adopted by the Montgomery County Planning Board and approved by the Montgomery County District Council.

Gross floor area means the sum of the gross horizontal area of the several floors of a building or structure measured from the exterior faces of the exterior walls or from the center line of party walls. In a covered but unenclosed area, such as a set of gasoline pumps or a drive-through area, gross floor area means the covered area. Gross floor area does not include:

(1) basement or attic areas with a headroom of less than 7 feet 6 inches;

(2) areas devoted to unenclosed mechanical, heating, air conditioning, or ventilating equipment;

(3) parking structures; or

(4) accessory structures to a residential building.

Growth policy means the Growth and Infrastructure Policy most recently adopted under Chapter 33A to provide guidelines for the administration of the Adequate Public Facilities Ordinance.

Hospital means an institution licensed as a hospital under state law.

Impact tax district means a planning policy area or combination of planning policy areas described under Section 52-41(c).

Impact tax district transportation program means the transportation improvement program described under Section 52-50.

Impact transportation improvement means an improvement listed in Section 52-50.

Improvement means a highway, intersection improvement, transit center, bus, bus shelter, hiker- biker trail, sidewalk connection, or park-and-ride lot, including planning, engineering, design services, right-of-way acquisition, grading, paving, curbs, gutters, drainage, sidewalks, signalization, signage, and all other construction and associated costs.

Major Activity Center means a commercial site, school, shopping area, transit area, Metro station, or other major employment area that generates pedestrian trips.

Master plan of highways means the “Master Plan of Highways” adopted by the Planning Board and approved by the District Council, and any similar plan adopted by either Gaithersburg or Rockville.

Nonresidential means the use of a building that is not a residential use and includes:

(1) offices, including general, medical, office parks, research parks, townhouse office buildings, government offices, and other similar uses;

(2) industrial uses, including truck terminals, warehouses, light or heavy industrial and manufacturing, industrial parks, and other similar uses;

(3) retail uses, including stores or shopping centers engaging in the sale of goods, restaurants, vehicle sales or service, banks or savings and loan institutions, theaters, post offices and other similar uses;

(4) places of worship;

(5) private elementary, secondary, or post-secondary schools; and

(6) other nonresidential uses, including hotels, motels, day care centers, nursing homes, recreational facilities, and other public facilities and similar uses;

Office-to-residential conversion is when an existing office building is turned into housing through adaptive reuse, renovation, or demolition.

Operating expense includes reasonable costs of staffing, advertising, marketing, building rental, furniture, supplies and materials, bus fuel, and personnel to operate a trip reduction program.

Policy area means any geographic area designated as a transportation policy area in the growth policy.

Programmed transportation improvement means an improvement listed in the current approved county capital improvements program or the state consolidated transportation program or any similar program adopted by either Gaithersburg or Rockville.

Property owner means any person, group of persons, firm, corporation, or other entity with a proprietary interest in the land on which a building permit has been requested.

Residential means the use of a building as a dwelling unit.

(1) Single-family detached residential includes detached single-family dwelling units.

(2) Single-family attached residential includes townhouses, duplexes and other attached single-family dwelling units.

(3) Multifamily residential includes:

(A) garden apartments;

(B) mid-rise and high-rise dwelling unit structures; and

(4) Senior residential means:

(A) a residential care facility as defined in Section 59.3.3.2.E used solely for housing seniors or persons with a disability;

(B) dwelling units located in the age-restricted section of a planned retirement community, as defined in Section 59.8.3.5;

(D) any household living unit constructed under Section 59.3.3.1 that is restricted by a covenant running with the land for housing persons who are 55 years of age or older.

(5) High-rise residential includes any dwelling unit located in a multifamily residential or mixed-use building that is taller than 4 stories.

Sidewalk connector means a sidewalk that provides a direct link or connection to a major activity center.

Stacked flats are dwelling units constructed in a stack of 2 or more dwelling units, where each dwelling unit is located either above or below an adjacent unit within a single building that is 4 stories or less.

Use and occupancy permit means a use and occupancy permit issued by the Department of Permitting Services under Chapter 8.

(1986 L.M.C., ch. 54, § 1; 1989 L.M.C., ch. 17, § 1; 1990 L.M.C., ch. 40, § 1; 1992 L.M.C., ch. 17, § 1; 1996 L.M.C., ch. 20, § 1; 1998 L.M.C., ch. 12, § 1; 1999 L.M.C., ch. 3, § 1; 2001 L.M.C., ch. 14 , § 1; 2002 L.M.C., ch. 4 , § 1; 2002 L.M.C., ch. 16, § 2; 2003 L.M.C., ch. 27, § 1; 2004 L.M.C., ch. 2 , § 2; 2007 L.M.C., ch. 16, § 1; 2010 L.M.C., ch. 35, § 2; 2010 L.M.C., ch. 44, § 1; 2011 L.M.C., ch. 19 , § 1; 2015 L.M.C., ch. 4, § 1; 2016 L.M.C., ch. 7 , § 2; 2016 L.M.C., ch. 8 , § 1; 2016 L.M.C., ch. 36, §1; 2018 L.M.C., ch. 1, §1; 2018 L.M.C., ch. 14, §1; 2020 L.M.C., ch. 37, §1; 2021 L.M.C., ch. 3 , §1; 2024 L.M.C., ch. 22, § 1.)

Editor’s note—Section 52-39 (formerly Section 52-47, 2016 L.M.C., ch. 7, § 1) is quoted in F.D.R. Srour Partnership v. Montgomery County, 179 Md. App. 109, 944 A.2d 1149 (2008), aff’d., 407 Md. 233, 964 A.2d 650 (2009).

2018 L.M.C., ch. 18, § 1, states: 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 of this Act, must apply to any application for a building permit filed on or after March 1, 2017. If a property owner is required to pay the development impact tax rates for transportation or public school improvements that take effect on March 1, 2017, the Director of Finance:

(a) must not require the payment of a transportation mitigation payment or a school facilities payment for the same development; and

(b) must refund the payment or give the property owner a credit against the development impact tax for transportation due for the development in the amount of any transportation mitigation payment made for the same development prior to March 1, 2017.

2018 L.M.C., ch. 18, § 2 states: Expedited Effective Date. .... This Act takes effect on the date on which it becomes law and must apply to any transportation mitigation payment made on or after November 29, 2016.

2018 L.M.C., ch. 1, § 2, states: Effective Date. ... This Act takes effect on June 22, 2017. The amendments in Section 1 must apply to development impact tax for public school improvements paid on or after June 22, 2017. The development impact tax rate for public school improvements imposed for a senior residential development, as defined in Section 1, payable between June 22, 2017 and July 1, 2017, must be $0.

2016 L.M.C., ch. 36, § 2, states: 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 of this Act, must apply to any application for a building permit filed on or after March 1, 2017. Any property owner who is required to pay the development impact tax rates for transportation or public school improvements that take effect on March 1, 2017 must not be required to pay a transportation mitigation payment or a school facilities payment.

Formerly, § 49A-1.

Sec. 52-40. Findings; purpose and intent.

(a) The master plan of transportation indicates that certain transportation facilities are needed in planning policy areas. Furthermore, the Growth and Infrastructure 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 transportation facilities necessary to support and accommodate that growth.

(b) Montgomery County, through its adoption of the Capital Improvements Program, indicates its commitment to provide transportation infrastructure.

(c) Montgomery County has determined that a combination of approaches will be necessary to fully achieve the level of impact transportation improvements needed to accommodate growth in the County. Thus, Montgomery County proposes to fund a program of transportation improvements through development impact taxes to allow new growth in the County.

(d) Imposing a development impact tax that requires new development to pay its pro rata share of the costs of impact transportation improvements necessitated by that development in conjunction with other public funds is a reasonable method of raising the funds to build improvements in a timely manner.

(e) The development impact tax funds, in part, the improvements necessary to increase the transportation system capacity, thereby allowing development to proceed. Development impact taxes are used exclusively for impact transportation improvements.

(f) In order to assure that the necessary impact transportation improvements are constructed in a timely manner, the County assures the availability of funds sufficient to construct the impact transportation improvements.

(g) The County retains the power to determine the types of impact transportation improvements to be funded by development impact taxes and to do all things necessary and proper to effectuate the purpose and intent of this 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 intends to impose development impact taxes until the County has attained build-out as defined by the General Plan. (1986 L.M.C., ch. 54, § 1; 1989 L.M.C., ch. 17, § 1; 1990 L.M.C., ch. 40, § 1; 1996 L.M.C., ch. 4, § 1; 1999 L.M.C., ch 3, § 1; 2002 L.M.C., ch. 4, § 1; 2004 L.M.C., ch. 2, § 2; 2007 L.M.C., ch. 16, § 1; 2008 L.M.C., ch. 5, § 1; 2016 L.M.C., ch. 7, § 2; 2016 L.M.C., ch. 36, §1; 2021 L.M.C., ch. 3, §1.)

Editor’s note—Section 52-40 (formerly Section 52-48, 2016 L.M.C., ch. 7, § 1) is cited in F.D.R. Srour Partnership v. Montgomery County, 179 Md. App. 109, 944 A.2d 1149 (2008) aff’d., 407 Md. 233, 964 A.2d 650 (2009). Section 52-40 (formerly Section 52-48, 2016 L.M.C., ch. 7, § 1) [formerly §49A-2] is cited in Wielepski v. Harford County, 98 Md. App. 721, 635 A.2d 43 (1994).

(a) must not require the payment of a transportation mitigation payment or a school facilities payment for the same development; and

2008 L.M.C., ch. 5, § 3, states: Sec. 3. Any regulation in effect when this Act takes effect that implements a function transferred to another Department or Office under Section 1 of this Act continues in effect, but any reference in any regulation to the Department from which the function was transferred must be treated as referring to the Department to which the function is transferred. The transfer of a function under this Act does not affect any right of a party to any legal proceeding begun before this Act took effect.

Formerly, § 49A-2.

Sec. 52-41. Imposition and applicability of development impact taxes.

(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.

(1) White Flint: The part of the North Bethesda Metro Station Policy Area included in the White Flint Special Taxing District in Section 68C-2;

(2) Red Policy Areas: Bethesda CBD, Chevy Chase Lake, Forest Glen, Friendship Heights, Great Seneca Life Science Center, Grosvenor, Glenmont, Lyttonsville, Medical Center, North Bethesda Metro Station, Purple Line East, Rock Spring, Rockville Town Center, Shady Grove, Silver Spring CBD, Takoma, Twinbrook, Wheaton CBD, White Oak Downtown, and Woodside Metro Station Policy Areas;

(3) Orange Policy Areas: Aspen Hill, Bethesda/Chevy Chase, Burtonsville Crossroads, Clarksburg East, Clarksburg Town Center, Derwood, Fairland/Briggs Chaney, Gaithersburg City, Germantown East, Germantown Town Center, Germantown West, Great Seneca Communities, Kensington/Wheaton, North Bethesda, Olney Town Center, Rockville City, and Silver Spring/Takoma Park Policy Areas;

(4) Yellow Policy Areas: Clarksburg West, Cloverly, Damascus, Colesville, Montgomery Village/Airpark, North Potomac, Olney, and Potomac Policy Areas; and

(5) Green Policy Areas: Rural East and Rural West Policy Areas.

(d) A Clergy House must pay the impact tax rate that applies to a place of worship if the house:

(1) is on the same lot or parcel, adjacent to. or confronting the property on which the place of worship is located; and

(2) 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.

(e) Development impact taxes collected from developments located in the cities of Gaithersburg and Rockville must be accounted for separately according to the municipality where the funds originated. These tax revenues must be used only to fund transportation improvements listed in a memorandum of understanding between the County and the respective City, which must be approved by the County Council. If the County and the respective City do not agree on a memorandum of understanding regarding the use of impact tax revenues, the County Council may appropriate funds to improvements which are consistent with the master plan of the respective City after holding a separate hearing on any specific improvement if the City so requests.

(f) A development impact tax must not be imposed on any building owned, and used primarily, by any agency or instrumentality of federal, state, County, or municipal government.

(g) A development impact tax must not be imposed on:

(1) any Moderately Priced Dwelling Unit built under Chapter 25A or any similar program enacted by either Gaithersburg or Rockville;

(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 less than 60% of the area median income, adjusted for family size;

(3) any Personal Living Quarters unit built under Section 59-3.3.2.D, 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 Project 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 development located in an enterprise zone designated by the State;

(6) except for a development located in the City of Rockville, any development located in a Qualified Opportunity Zone certified by the United States Treasury Department or in an area previously designated as an Opportunity Zone, including a development located in the following census tracts as defined by their 2010 Census Boundaries: Silver Spring – 25.00, 26.01; Takoma Park – 17.03, 20.00, 23.01; White Oak – 15.05, 15.09, 14.21; Wheaton – 38.00; Rockville – 9.04; Gaithersburg – 7.24, 7.23, 7.13, 8.13; and Germantown – 8.30;

(7) a house built by high school students under a program operated by the Montgomery County Board of Education;

(8) a farm tenant dwelling;

(9) a bioscience facility;

(10) a multifamily dwelling unit with 3 or more bedrooms in a multifamily structure;

(11) any single-family attached or detached dwelling units with a gross floor area of 1,800 square feet or less, or a gross floor area of 2,200 square feet or less including an attached garage; or

(12) any development that is within one-half mile of a Metro station, within a Parking Lot District, and that provides no onsite parking.

(h) The development impact tax does not apply to:

(1) any reconstruction or alteration of an existing building or part of a building that does not increase the gross floor area of the 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 gross floor area of the previous building, if:

(A) an application for a building permit is filed within four years after demolition or destruction of the previous building was substantially completed;

(B) the Director of the Department of Permitting Services or the Director’s designee finds that the applicant was unable to apply for a building permit or commence construction within four years after demolition or destruction of the previous building was substantially completed due to circumstances beyond the control of the applicant or the applicant’s agents; or

(C) 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.

(4) office-to-residential conversions when the building is adaptively reused or renovated for multi-family housing; and

(5) the conversion of office to multi-family, single-family detached, or single-family attached housing when demolition is involved.

However, if in any case the development impact 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. (1986 L.M.C., ch. 54, § 1; 1989 L.M.C., ch. 17, § 1; 1990 L.M.C., ch. 40, § 1; 1992 L.M.C., ch. 17, § 1; 1995 L.M.C., ch. 25, § 1; 2001 L.M.C., ch. 10, § 1; 2002 L.M.C., ch. 4, § 1 § 1; 2003 L.M.C., ch. 27, § 1; 2004 L.M.C., ch. 2, § 2; 2007 L.M.C., ch. 16, § 1; 2010 L.M.C., ch. 35, § 2; 2011 L.M.C., ch. 1, § 1; 2015 L.M.C., ch. 4, § 1; 2015 L.M.C., ch. 37, § 1; 2016 L.M.C., ch. 7, § 2; 2016 L.M.C., ch. 36, § 1; 2020 L.M.C., ch. 37, §1; 2024 L.M.C., ch. 22, § 1.)

Editor’s note—Section 52-41 (formerly Section 52-49, 2016 L.M.C., ch. 7 , § 1) is cited in F.D.R. Srour Partnership v. Montgomery County, 179 Md. App. 109, 944 A.2d 1149 (2008), aff’d., 407 Md. 233, 964 A.2d 650 (2009).

See County Attorney Opinion dated 3/28/91 commenting and proposing legislation to amend the County Code so that it will not conflict with State law regarding development impact tax.

(a) must not require the payment of a transportation mitigation payment or a school facilities payment for the same development; and

2018 L.M.C., ch. 2, § 1, amends 2015 L.M.C., ch. 37, § 2, to state: Sec. 2. Applicability.

(a) Except as provided in paragraph (b) or (c), County Code Section 52-41(g)(5), formerly 52-49(g)(5), and Section 52-54(c)(5), formerly 52-89(c)(5), both inserted by Section 1 of this Act, do not apply to any development which received preliminary subdivision plan approval or site plan approval (or a similar approval in a municipality) before October 22, 2015.

(b) If a development approved before October 22, 2015 is amended any time thereafter to include additional dwelling units and at least 25% of the additional dwelling units are exempt under paragraph (1), (2), (3), or (4) of Section 52-54(c), or any combination of them, then Section 52-41(g)(5) and Section 52-54(c)(5), apply to the additional units.

(c) If the relevant preliminary subdivision plan was approved before January 1, 2008, Sections 52-41(g)(5) and 52-54(c) apply to building permit applications for the unbuilt portion of the development.

2016 L.M.C., ch. 7, § 3, states: Reporting. When a development proposes at least 25% affordable dwelling units under Section 52-41(g)(5) and Section 52-54(c)(5), the Department of Housing and Community Affairs must report to the Council the location of the development, the total number of units in the development, and the number of affordable units within 30 days from the date of the agreement to build MPDUs. If a development with 25% of affordable dwelling units does not obtain an agreement to build MPDUs with the Department of Housing and Community Affairs, then the Department of Permitting Services must report to the Council the use of any impact tax exemption under Section 52-41(g)(5) and Section 52-54(c)(5) within 30 days from the date the exemption is granted.

2015 L.M.C., ch. 37, § 2, states: Applicability. County Code Section 52-49(g)(5) (now Section 52-41(g)(5), 2016 L.M.C., ch. 7, § 1) and Section 52-89(c)(5) (now Section 52-54(c)(5), 2016 L.M.C., ch. 7, § 1), both inserted by Section 1 of this Act, do not apply to any development which received preliminary subdivision plan approval or site plan approval (or a similar approval in a municipality) before this Act took effect.

2011 L.M.C., ch. 1, § 2, amended by 2013 L.M.C., ch. 4, § 3, states, in part: ... Applicability; Refunds. ... This Act takes effect on December 1, 2010, and applies to any development located in the White Flint impact tax district for which a building permit is issued on or after December 1, 2010. If any development impact tax was collected under Article VII (now Article IV, 2016 L.M.C., ch. 7, § 1) of County Code Chapter 52 before this Act took effect for any development to which this Act applies, the Director of Finance must promptly refund that tax as if a refund were due and claimed under County Code Section 52-54 (now Section 52-46, 2016 L.M.C., ch. 7, § 1).

Formerly, § 49A-4.

Sec. 52-42. Collection of development impact taxes.

(a) The Department of Permitting Services must determine the amount of the applicable development impact tax.

(b) Each applicant for a building permit for development that is not exempt from the development impact tax must supply to the Department of Permitting Services for each requested building permit:

(1) The number and type of dwelling units for residential development; and

(2) The gross floor area and type of development for nonresidential development.

The applicant must submit for inspection relevant support documentation as the Department requires.

(c) The Department of Permitting Services must not issue a building permit for development that is not exempt from the development impact tax unless:

(1) the applicant has paid the applicable development impact tax;

(2) the applicant is entitled to a credit under Section 52-47 in the amount of the applicable development impact tax; or

(3) an appeal has been taken and a bond or other surety posted under Section 52-48.

(d) When a person applies to a municipality in the County for a building permit for a building or dwelling unit, the applicant must show that all payments due under this Section with respect to the building or unit have been paid. The Director of Finance must promptly refund any payment made for any building or part of a building for which a building permit is not issued by the municipality.

(e) Nothing in this Article changes or supercedes any other requirement of City, County, state or federal law that may apply to the development, including county zoning and subdivision regulations that may impose on-site and off-site transportation improvement requirements and local area review requirements implemented by the Planning Board.

(f) If any person fails to pay the tax due under Section 52-43, that person is liable for:

(1) interest on the unpaid tax at the rate of one percent per month for each month or part of a month after the date for payment of the tax; and

(2) a penalty of 5 percent of the amount of the tax per month or part of a month after the date for payment of the tax, not to exceed 25 percent of the tax.

The Director of Finance must collect any interest and penalty as a part of the tax.

(g) If any person fails to pay the tax when due, the Director of Finance must obtain information on which to calculate the tax due. As soon as the Director obtains sufficient information to calculate any tax due, the Director must assess the tax and penalties against the person. The Director must notify the person by mail sent to the person's last known address of the total amount of the tax, interest, and penalties. The total amount must be paid within 10 days after the notice is mailed.

(h) Every person liable for any tax under this Article must preserve for 2 years all records necessary to determine the amount of the tax. The County may inspect the records at any reasonable time.

(i) Any failure to pay the tax due under this Article, and any violation of this Section, is a Class A violation. Each violation is a separate offense. A conviction does not relieve any person from payment of the tax.

(j) Section 52-21 applies to this tax. The lien imposed under this Article has the same priority and may be enforced in the same manner as a lien imposed in case of nonpayment of County real property taxes.

(k) If, within 10 years after a building permit is issued, any person changes the use of all or part of a building to a use for which a higher tax would have been due under this Article when the building permit was issued (including a change from a status, use, or ownership that is exempt from payment to a status, use, or ownership that is not so exempt), the owner of the 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 of the building had originally been used as it is later used. If the building owner does not pay any additional tax when due, each later owner is liable for the tax, and any interest or penalty due, until all taxes, interest, and penalties are paid.

(l) Notwithstanding any other provisions of this Chapter, an applicant for a building permit need not pay any development impact tax, Transportation Mitigation Payment, or School Facilities Payment due until:

(1) if the building is a single-family detached or attached residential building, the earlier of:

(A) the final inspection of the building by the Department of Permitting Services; or

(B) 6 months after the building permit is issued; and

(2) if the building is a multi-family residential or non-residential development, the earlier of:

(A) the final inspection of the building by the Department of Permitting Services; or

(B) 12 months after the building permit is issued.

The rate of the tax or Payment due is the rate in effect when the tax or Payment is paid. A permittee may appeal the imposition or calculation of the tax or Payment under Section 52-48. If the Department of Permitting Services or a municipality revokes or suspends a building permit or issues a stop-work order solely because the permittee did not pay any tax or Payment due under this Article, the permittee or any other party must not appeal the permit revocation or suspension or the stop work order issuance, or any modification of either, under Chapter 8. If the appealing party posts a bond or other sufficient surety satisfactory to the County Attorney as provided in Section 52-48, the Department or municipality must reissue or reinstate the building permit or revoke the stop-work order.. (1986 L.M.C., ch. 54, § 1; 1990 L.M.C., ch. 40, § 1; 1992 L.M.C., ch. 17, § 1; 1996 L.M.C., ch. 20, § 1; 1998 L.M.C., ch. 12, § 1; 1999 L.M.C., ch. 3, § 1; 2001 L.M.C., ch. 14, § 1; 2002 L.M.C., ch. 4, § 1; 2002 L.M.C., ch. 16 § 2; 2011 L.M.C., ch. 19, § 1; 2016 L.M.C., ch. 7, § 2.)

Editor’s note—Section 52-39 (formerly Section 52-47, 2016 L.M.C., ch. 7, § 1) is quoted and cited in F.D.R. Srour Partnership v. Montgomery County, 179 Md. App. 109, 944 A.2d 1149 (2008), aff’d., 407 Md. 233, 964 A.2d 650 (2009).

See County Attorney Opinion dated 3/28/91 commenting and proposing legislation to amend the County Code so that it will not conflict with State law regarding development impact tax.

Formerly, § 49A-5.

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