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(a) The Council must establish the rates for each school impact tax district by resolution after a public hearing advertised at least 15 days in advance.
(b) Any Productivity Housing unit, as defined in Section 25B-17(j), must pay the tax at 50% of the otherwise applicable rate.
(c) The County Council by resolution, after a public hearing advertised at least 15 days in advance, may increase or decrease the rates established under this Section.
(d) 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 of each odd-numbered year in accordance with the update to the Growth and Infrastructure Policy using the latest student generation rates and average Montgomery County Public School construction costs. The Director must calculate the adjustment to the nearest multiple of one dollar. The Director must publish in the County Register the amount of this adjustment not later than May 1 of each odd-numbered year.
(1) Inflation cap on tax rate increases. Notwithstanding subsection (d), the Director must cap the biennial tax rate adjustment not to exceed 20%.
(2) Carryover of biennial tax rate adjustments in excess of 20%. If the biennial tax rate adjustment exceeds 20%, the excess dollar amount must be carried over and added to the tax rate after calculating the next biennial adjustment. If this total adjustment, including any carried over value, again exceeds 20%, the excess dollar amount must be carried over and added to the tax rate after calculating the biennial adjustment.
(e) Any non-exempt dwelling unit in a development in which at least 25% of the dwelling units are exempt under Section 52-54(d)(1) must pay the tax discounted by an amount equal to the impact tax rate applicable in the Infill School Impact Area for that unit type up to the amount of the impact tax otherwise applicable.
(f) A 3-bedroom multi-family dwelling unit located in an Infill Impact Area must pay the tax at 40 percent of the otherwise applicable rate.
(g) Stacked flats must pay the multifamily low-rise applicable rate.
(h) A 1-bedroom garden apartment must be calculated using the high-rise residential rate if the preliminary plan was approved before January 1, 2025. (2003 L.M.C., ch. 26, § 1; 2007 L.M.C., ch. 16, § 1; 2016 L.M.C., ch. 7, § 2; 2016 L.M.C., ch. 36, § 1; 2018 L.M.C., ch. 3, §1; 2020 L.M.C., ch. 37, § 1; 2021 L.M.C., ch. 3, §1; 2023 L.M.C., ch. 19, § 1; 2024 L.M.C., ch. 22, § 1.)
Editor’s note—2023 L.M.C., ch. 19
, § 3, states: Sec. 3. Transition. 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 the effective date of this Act.
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.
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.
(a) The Department of Finance must maintain and keep adequate financial records that:
(1) show the source and disbursement of all revenues under this Article;
(2) account for all funds received; and
(3) assure that the funds are used exclusively for the public school improvements listed in subsection (d).
(b) Interest earned on revenues under this Article must be used solely for public school improvements.
(c) The Department of Finance must annually issue a statement for this account.
(d) Revenues raised under this Article may be used to fund planning design, acquisition of land, site improvements, utility relocation, construction, and initial furniture and equipment for any:
(1) new public elementary or secondary school;
(2) addition to an existing public elementary or secondary school that adds one or more teaching stations; or
(3) modernization of an existing public elementary or secondary school to the extent that the modernization adds one or more teaching stations. (2003 L.M.C., ch. 26, § 1; 2016 L.M.C., ch. 7, § 2; 2016 L.M.C., ch. 36, § 1.)
Editor’s note—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.
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.
(b) Any person who has paid a tax under this Article may apply for a refund of the tax if the County has not appropriated the funds for public school improvements of the types listed in Section 52-56(d) by the end of the sixth fiscal year after the tax is collected.
(c) The Director of Permitting Services must investigate each claim and hold a hearing at the request of the petitioner. Within 3 months after receiving a petition for refund, the Director must provide the petitioner, in writing, with a decision on the refund request. The Director must specify the reasons for the decision, including, if a refund is claimed under subsection (b), a determination of whether funds collected from the petitioner, calculated on a first-in-first-out basis, have been appropriated or otherwise formally designated for public school improvements of the types listed in Section 52-56(d) within 6 fiscal years. (2003 L.M.C., ch. 26, § 1; 2016 L.M.C., ch. 7, § 2.)
(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 of the type listed in Section 52-56(d), including costs of site preparation. A property owner may receive credit for land dedicated for a school site, if:
(b) A property owner must receive a credit for constructing or contributing to an improvement of the type listed in Section 52-56(d), including costs of site preparation.
(c) A property owner may receive credit for land dedicated for a school site, if:
(1) the density calculated for the dedication area is excluded from the density calculation for the development site; and
(2) the Montgomery County School Board agrees to the site dedication.
(d) 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:
(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, if known then, finish the improvement or land transfer;
(3) a requirement that the property owner complete the improvement according to Montgomery County Public Schools standards; and
(4) such other terms and conditions as MCPS finds necessary.
(e) MCPS must:
(1) review the improvement plan or dedication;
(2) verify costs or land value and time schedules;
(3) 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 (c);
(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.
(f) An applicant for subdivision, site plan, or other development approval from the County, Gaithersburg, or Rockville, or the owner of property subject to an approved subdivision plan, development plan, floating zone plan, or similar development approval, may seek a declaration of allowable credits from MCPS. MCPS must decide, within 30 days after receiving all necessary materials from the applicant, whether any public school improvement which the applicant has constructed, contributed to, or intends to construct or contribute to, will receive a credit under this subsection. If during the initial 30-day period after receiving all necessary materials, MCPS notifies the applicant that it needs more time to review the proposed improvement, MCPS may defer its decision an additional 15 days. If MCPS indicates under this paragraph that a specific improvement is eligible to receive a credit, the Director of Permitting Services must allow a credit for that improvement. If MCPS cannot or chooses not to perform any function under this subsection or subsection (c), the Department of Permitting Services must perform that function.
(g) (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 $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 $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 $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 $1,000 per residence.
(3) Application for the credit and administration of the credit must be in accordance with Subsections 52-107(e) and (f).
(4) A person must not receive a tax credit under this Section if the person receives any public benefit points for constructing units with accessibility features under Chapter 59.
(h) The Director of Finance must not provide a refund for a credit which is greater than the applicable tax.
(i) 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.
(j) 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. (2003 L.M.C., ch. 26, § 1; 2013 L.M.C., ch. 32, § 1; 2015 L.M.C., ch. 56, § 1; 2016 L.M.C., ch. 7, § 2; 2016 L.M.C., ch. 8, § 1; 2016 L.M.C., ch. 36, § 1; 2017 L.M.C., ch. 12, §1; 2020 L.M.C., ch. 37, § 1.)
Editor’s note—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.
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.
(a) In addition to the tax due under this Article, an applicant for a building permit must pay to the Department of Finance a Utilization Premium Payment if such payment was required under the Annual School Test in effect at the time the building was approved.
(b) The Council by resolution, after a public hearing advertised at least 15 days in advance, must establish the rates for the Utilization Premium Payment.
(c) The Director of Finance, after advertising and holding a public hearing, must adjust the rates set in or under this Section effective on July 1 of each odd-numbered year in accordance with the update to the Growth and Infrastructure Policy using the latest student generation rates and school construction cost data. The Director must calculate the adjustment to the nearest multiple of one dollar. The Director must publish the amount of this adjustment not later than May 1 of each odd-numbered year.
(d) The Payment must be paid at the same time and in the same manner as the tax under this Article.
(e) The Department of Finance must retain funds collected under this Section in an account to be appropriated for:
(1) any public school improvement that adds capacity designed to alleviate overutilization in the school service area from which the funds were collected; or
(2) for capital projects adding capacity at any school adjacent to the school for which the funds were collected. Adjacent schools must be determined using the Planning Board’s Annual School Utilization Report.
(f) The Utilization Premium Payment must not be imposed on any:
(1) Moderately Priced Dwelling Unit built under Chapter 25A or any similar program enacted by either Gaithersburg or Rockville;
(2) 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) 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; or
(4) 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. (2020 L.M.C., ch. 37, § 1
; 2024 L.M.C., ch. 22
, § 1.)
Editor’s note—Former Section 52-59 (originally Section 52-94), relating to school facilities payment, was repealed by §1 of 2016 L.M.C., ch. 36. The section was derived from 2003 L.M.C., ch. 26, § 1; 2007 L.M.C., ch. 16, § 1; 2010 L.M.C, ch. 35, § 2; 2012 L.M.C., ch. 28, § 2; and 2016 L.M.C., ch. 7, § 2.
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.
ARTICLE VI. Reserved.*
*Editor’s note—Former Article VI, Expedited Development Approval Excise Tax, containing former Sections 52-60 through 52-65, derived from 1997 L.M.C., ch. 34, § 1, as amended by 2004 L.M.C., ch. 2, § 2 and 2016 L.M.C., ch. 7, § 2, was repealed by 2021 L.M.C., ch. 3, § 1.
See County Attorney Opinion dated 5/21/92 explaining that the construction excise tax is payable only if a building permit is issued and construction takes place.
Former Article VIII, relative to excise tax on certain construction, derived from CY 1991 L.M.C., ch. 44, §1 and 1994 L.M.C., ch. 14, § 1, was repealed by 1995 L.M.C., ch. 15, § 1.
Editor’s note—Former Section 52-60, Payment, derived from 1997 L.M.C., ch. 34, §1 and 2004 L.M.C., ch. 2, §2, was repealed by 2021 L.M.C., ch. 3, §1.
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