# Montgomery County Code — Part II. Local Laws, Ordinances, Resolutions, Etc. ## Chapter 14. Development Districts. ### Article I. General Provisions. **Sec. 14-1. Short Title.** This Chapter may be referred to as the Montgomery County Development District Act. **Sec. 14-2. Purposes.** (a) The purposes of this Chapter are to: (1) authorize the County to provide financing, refinancing or reimbursement for the cost of infrastructure improvements necessary for the development of land in areas of the County of high priority for new development or redevelopment by creating development districts in which special assessments, special taxes, or both, may be levied; (2) authorize the issuance of bonds or other obligations of the County that are payable from special assessments or special taxes collected, in a development district; (3) specify the procedures to be followed in creating a development district, issuing bonds, and assessing and enforcing the collection of special assessments or special taxes in such a district; and (4) provide for the tax-exempt nature and form of the bonds. (b) Development districts would be especially useful in achieving these purposes where: (1) an approved master plan recommends significant development in a specific area of the County; (2) the infrastructure needs necessary to serve that development include extensive and long-term facilities; and (3) the real estate market and the availability of land will permit significant development within the life of a development district. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-3. Definitions.** In this Chapter the following words have the following meanings: Adequate Public Facility means any infrastructure improvement required by the Planning Board as a condition of approving a preliminary plan of subdivision under Section 50-35(k) or identified in the County Growth Policy as necessary for adequate public facilities approval in a development district. Additional Public Facility Capacity means the provision of an infrastructure improvement not fully funded in the first 4 years of the County's then-applicable Capital Improvement Program. Administrative Expense means any expense incurred by any County department or office in connection with the administration or funding of a development district, including: (1) any expense directly related to levying and collecting any special tax, special assessment, fee, or charge under this Chapter; (2) any expense of complying with any arbitrage rebate requirement or disclosure requirement under federal or state law; (3) an allocable share of the salary of any County employee who is primarily responsible for the administration or funding of a development district; (4) an allocable share of County administrative overhead related to the administration and funding of a development district; and (5) the fees and expenses of any fiscal agent employed by the County in connection with development district bonds. Bond means a special obligation or revenue bond, note, or similar instrument issued under this Chapter or any other law if the indebtedness evidenced thereby will be repaid from revenue generated by special assessments, special taxes, fees, or charges levied under this Chapter in a development district. Cost means the aggregate dollar cost of: (1) building, rebuilding, or renovating any infrastructure improvement, and acquiring any land, structure, real or personal property, right, right-of-way, franchise, easement, or interest; (2) machinery and equipment, including machinery and equipment needed to expand or enhance services in a development district; (3) financing charges and interest before and during construction and, if the Executive finds it advisable, for a limited period after completing construction; interest and reserves for principal and interest, including costs of municipal bond insurance and any other financial guaranty, costs of issuance, and administrative expenses; (4) extensions, enlargements, additions, or improvements; (5) architectural, engineering, financial, and legal services; (6) plans, specifications, studies, surveys, and estimates of costs or revenues; (7) expenses necessary or incident to deciding whether to proceed with a district or any infrastructure improvement; and (8) any other expense necessary or incident to building, acquiring, or financing any infrastructure improvement. Development includes redevelopment of underdeveloped land. Development District means a special taxing district created for the purposes listed in Section 14-2 and, if a resolution adopted under Section 14-9 creates one or more subdistricts in a development district, each subdistrict. Infrastructure Improvement means a school, police station, fire station, library, civic or government center, storm drainage system, sewer, water system, road, bridge, culvert, tunnel, street, transit facility or system, parking lot or facility, sidewalk, lighting, park, recreational facility, or any similar public facility, and the land where it is or will be located. Owner means a person or entity with legal title to property, or a contract purchaser of a property. Special Assessment means a levy on property which is assessed in relation to any special benefit received from the construction of one or more infrastructure improvements to support development in a development district. Special Benefit means any advantage or betterment accruing to real property as the direct result of any infrastructure improvement. The allocation of any additional public facility capacity to a development project is a special benefit. Special Fund means an independent account in which special assessment, special tax, fee, or charge payments received for a development district are deposited and, if a resolution adopted under Section 14-9 creates one or more subaccounts in a special fund, each subaccount. Special Tax means a property or excise tax levied in a development district, not based on any special benefit received, to pay for one or more infrastructure improvements to support development in that district. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-4. Powers of County.** In addition to any power granted under any other law, the County may, subject to applicable state law and this Chapter: (a) create one or more development districts; (b) levy special assessments, special taxes, fees, or charges, in any development district; and (c) issue bonds and other obligations payable from special assessments, special taxes, fees, or charges, levied in any development district. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. ### Article II. Creating A Development District. **Sec. 14-5. Location.** Any development district: (a) must be located entirely in the County, but may include land in any municipality; (b) need not consist of a contiguous geographic area unless otherwise required by State law; (c) should largely, if not entirely, consist of undeveloped or underdeveloped land; and (d) may be used to finance an infrastructure improvement located outside the district if the improvement is located in the County and related to the development or use of land in that development district. **Sec. 14-6. First Council Resolution.** (a) If a petition to create a development district signed by at least 80 percent of the owners of real property and the owners of at least 80 percent in value of the real property, as shown by the most recent assessment records available from the State Department of Assessments and Taxation or any successor agency on the date the petition is filed, located in a proposed development district, is filed with the Council, the Council must hold a public hearing after at least 15 days notice in two newspapers of general circulation in the County. The petition must specify the boundaries of the proposed district and list the maximum number of housing units and the maximum nonresidential space that the signing property owners intend to build in the district. (b) Alternatively, the Council, on request of the Executive or on its own motion, may hold a public hearing after giving notice as required in subsection (a). The notice must: (1) specify the proposed boundaries of the proposed district, and (2) list the maximum number of housing units and the maximum nonresidential space expected to be built in the district. (c) After holding a hearing under subsection (a), the Council, by resolution approved by the Executive, may declare its intent to create a development district consisting of a specified geographic area. In the resolution the Council must explain why intensive development of and public investment in that area during the term of the district will benefit the public interest. (d) If the Executive disapproves a resolution adopted under this Section within 10 days after it is adopted and the Council readopts it by a vote of 7 Councilmembers, or if the Executive does not act within 10 days after the Council adopts it, the resolution takes effect. (e) For the purposes of this Section, multiple owners of a single parcel of real property must be treated as one owner and a single owner of multiple parcels must be treated as one owner. (f) The adoption of a resolution under this Section does not: (1) obligate the Council to create a development district; (2) confer any contract, property, or other right on any person; or (3) limit a district to the area described in the resolution. (g) After the Council has adopted a resolution under Section 14-6, the Executive may require any applicant for provisional adequate public facilities approval under Section 14-7 to pay one or more filing fees or provide other financial assurances, in amounts and installments set by Executive regulation, to cover all costs of: (1) Executive review of the proposed district; (2) preparation of the fiscal report required under Section 14-8; and (3) preparation of any bond issue or other financing after the district is created. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-7. Planning Board Review; Compliance with Adequate Public Facilities and Annual Growth Policy Requirements.** (a) After the Council has adopted a resolution under Section 14-6, one or more owners of land located in the proposed district may submit an application for provisional adequate public facilities approval, covering the entire proposed district, to the Planning Board. The application must: (1) explain how each development located in the proposed district will comply with all applicable zoning and subdivision requirements, including any action necessary under Section 50-35(k); (2) identify any infrastructure improvement necessary to satisfy the Growth Policy's adequate public facilities requirements for a development district; and (3) estimate the cost to provide each such improvement. (b) Within 180 days after receiving an application under subsection (a) and all information needed to review that application, the Board must jointly review for compliance with Section 50-35(k) and the Growth Policy all developments located in the proposed district as if they were one development. The Board may extend the deadline in this subsection for another 90 days, by notifying each applicant and the Executive and Council, if delays beyond the Board’s control require more time to conduct the required review. The Council at any time may waive any applicable deadline under this Section if the public interest so requires. In its review, the Board must apply all otherwise applicable standards and procedures. The Board may conditionally approve an application if it finds that the proposed district will meet all requirements under Section 50-35(k) and any added requirements which apply to a district under the Growth Policy. The Board may condition its approval on, among other things, the creation and funding of the district and the building of no more than the maximum number of housing units and the maximum nonresidential space listed in the petition filed under Section 14-6 or any later amendment to the petition. (c) In the aggregate, the applications approved must commit the applicants to produce (through the funding of the proposed development district or otherwise) the infrastructure improvements needed to meet the applicants' adequate public facility requirements in the proposed district and any added requirements which apply to an applicant under the Growth Policy. In its approval, the Board must list those infrastructure improvements. (d) An applicant may withdraw a development from a district before the district is created under Section 14-9(c). An applicant must not withdraw a development after the district is created. If an applicant withdraws a development before the district is created, the applicant's provisional adequate public facility approval is cancelled. If any withdrawal would significantly impair the ability of the proposed district to finance the required infrastructure improvements, the Planning Board may modify or cancel any approval under subsection (b) and may attach new conditions to any previous approval. (e) (1) After a development district is created and the financing of all required infrastructure improvements is arranged, any development located in the district has for all purposes satisfied: (A) the adequate public facility requirements of Section 50-35(k); (B) any added requirements which apply to a district under the Growth Policy; and (C) any other requirement to provide infrastructure improvements which the County adopts within 12 years after the district is created. (2) This subsection does not relieve any taxpayer from paying a generally applicable County tax, assessment, fee, or charge. (f) The County may reserve for its own use or transfer to other owners through regular development approval processes, or as otherwise provided by law, any additional public facility capacity attributable to improvements financed by the district which exceeds the capacity required for developments in the district. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-8. Executive Fiscal Report.** (a) After the Planning Board has acted under Section 14-7(b) and within 180 days after the Executive has received all information necessary to review the application, the Executive, after consulting the Superintendent of Schools with respect to school facilities and the Washington Suburban Sanitary Commission with respect to water and sewer facilities, must submit a report estimating: (1) the cost of each infrastructure improvement listed by the Planning Board under Section 14-7(c) or recommended by the Executive under subsection (b); and (2) (A) the amount of revenue needed annually to finance all infrastructure improvements funded, fully or partly, by a district; and (B) the rate for each tax, assessment, fee, or charge available to the district that would produce the necessary revenue. The Executive should compare these estimates to those submitted by the applicants under Section 14-7(a). The Executive may extend the 180-day deadline in this subsection for another 90 days, by notifying the Council, if delays beyond the Executive’s control require more time to produce the required report. The Council at any time may waive any applicable deadline under this subsection if the public interest so requires. (b) In this report the Executive should also recommend whether to create a district, its boundaries if one is created, whether any subdistricts should be created in the district and, if so, their boundaries, which infrastructure improvements the district should fully or partly fund, and alternative financing or revenue-raising measures. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-9. Second Council Resolution.** (a) The Council must hold a public hearing on the final resolution to create a development district not earlier than 45 days after the Planning Board has acted on all applications filed under Section 14-7 for that district. (b) (1) The Council must give notice of the hearing by: (A) advertisement in at least two newspapers of general circulation in the County at least 21 days before the hearing; and (B) first-class mail to the record owner of each property located in the proposed district at the address shown on the most recent tax assessment records available 30 days before the hearing from the State Department of Assessments and Taxation or any successor agency. The Council must retain sufficient proof that each required notice was mailed. However, the failure of any property owner to receive notice by mail does not invalidate the adoption of a resolution under this Section or any later action by the Council or Executive. (2) Each notice mailed under this subsection must include: (A) a copy of the proposed resolution to create a district; and (B) an estimated rate for any tax, assessment, fee, or charge proposed to fund infrastructure improvements for the district, or, if the estimated rate cannot reasonably be determined, a description of how the rate will be set. (c) If the Council intends to use special obligation debt to finance the district, and the district was initiated by the Council under subsection 14-6(b), before the Council adopts a resolution under this Section the Council must receive a petition to create a development district signed by at least 80 percent of the owners of real property and the owners of at least 80 percent in value of the real property, as shown on the latest tax assessment records available from the State Department of Assessments and Taxation or any successor agency, located in the proposed district. (d) If the district to be approved under this Section would extend beyond the specified geographic area approved under Section 14-6(c), before the Council adopts a resolution under this Section the Council must also receive a petition to create the district signed by at least 80 percent of the owners of the real property and the owners of at least 80 percent in value of the real property located in the area added to the district, as shown on the latest tax assessment records available from the State Department of Assessments and Taxation or any successor agency. (e) After the public hearing, the Council by resolution approved by the Executive may create a development district. If the Executive disapproves a resolution within 10 days after it is adopted and the Council readopts it by a vote of 7 Councilmembers, or if the Executive does not act within 10 days after the Council adopts it, the resolution takes effect. (f) A resolution adopted under this Section must: (1) define the development district by specifying its boundaries and listing the tax account number of each property in the district; (2) list each infrastructure improvement that will be financed by the development district, the estimated completion date and cost of that improvement, and the share of that cost which the County or another government agency will pay; (3) create, and specify the amount or percentage of, a contingency account for unexpected cost overruns; and (4) create a special fund for the development district. (g) A resolution adopted under this Section may also require that a building permit must not be issued for any listed development (or part of a development) in the district until the earlier of: (1) the date a specific infrastructure improvement begins construction; or (2) a specific date. (h) An infrastructure improvement financed by a development district may include any infrastructure required by the Planning Board as a condition of project, preliminary, or site plan approval. Except as expressly approved by a Council resolution, a development district must not finance that part of the cost of any infrastructure improvement that has: (1) been paid for by any other government agency, or; (2) received a credit toward the payment of the development impact tax or any other tax, fee, or charge. (i) A district may finance an infrastructure improvement which primarily serves residents or occupants of only one development or subdivision only if: (1) the improvement also provides added transportation capacity, enhanced public services, or other significant public benefits to residents or occupants of one or more other developments or subdivisions; or (2) (A) either the Planning Board or the Executive recommends that the district finance that improvement; and (B) the Council concludes that the public interest justifies the district financing that improvement. (j) The Council may amend a resolution adopted under this Section after giving notice as required by subsection (b), including notice by mail to each property owner in the district. If the Executive disapproves an amended resolution within 10 days after it is adopted and the Council readopts it by a vote of 6 Councilmembers, or if the Executive does not act within 10 days after the Council adopts it, the amended resolution takes effect. (k) A resolution adopted under this Section may create one or more subdistricts in a development district if the petition to create the development district filed under Section 14-6 was signed by at least 80 percent of the owners of real property and the owners of at least 80 percent in value of the real property located in the proposed subdistrict. All special taxes, assessments, fees, or charges levied on the properties located in any subdistrict must be dedicated to a subaccount of the special fund and used to fund the construction of specified infrastructure improvements in or which benefit the district. If any subdistrict is created, the resolution adopted under this Section must: (1) specify the boundaries of each subdistrict; (2) list the tax account number of each property in the subdistrict; (3) list the amount of each infrastructure improvement to be financed by special taxes, assessments, fees, or charges applicable in the subdistrict; and (4) create designated subaccounts in the special fund. (l) The adoption of a resolution under this Section does not: (1) obligate the County to finance any infrastructure improvement or levy any tax, assessment, fee, or charge in the development district; or (2) confer any contract, property or other right on any person. (a) except as expressly approved by a Council resolution, a tax imposed under the authorizing law must not pay for that part of the cost of any infrastructure improvement that has: (1) been paid for by any other government agency, or; (2) received a credit toward the payment of the development impact tax or any other tax, fee, or charge; and (b) the County must not allow a credit toward the payment of any development impact tax levied under Chapter 52, or any other tax, fee, or charge, for that part of any infrastructure improvement financed by the special taxing district. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. ### Article III. Financing A Development District. **Sec. 14-10. Special Taxes and Assessments.** (a) A resolution adopted under Section 14-9 must also authorize the imposition of a special assessment, special tax, fee, or charge, or any combination of them, in the development district at a rate designed to provide adequate revenues to: (1) pay the principal of, interest on, and redemption premium, if any, on the bonds; (2) replenish any debt service reserve fund; (3) pay the cost of any approved infrastructure improvement, or reimburse the County for the cost of any approved infrastructure improvement paid from other County funds; (4) pay directly the cost of any approved infrastructure improvement built or funded other than by the County; and (5) pay the administrative expenses of the development district. The resolution may reserve the Council's authority to adjust any rate schedule. (b) The resolution must provide, except when clearly inconsistent with state law, that: (1) any property which is fully developed before the development district is created is exempt from any special assessment, special tax, fee, or charge imposed under this Chapter; and (2) the owner of any property exempt from payment under paragraph (1) which is later developed more intensively and benefits from any development capacity attributable to infrastructure improvements financed by the district must pay any tax, fee, or charge that it would have otherwise paid under this Chapter. Under paragraph (1), “fully developed” property does not include any property developed after the Council adopted a resolution under Section 14-6 by any property owner who signed a petition under subsection 14-6(a) or that owner’s successor in interest, and any such property is not exempt from any special assessment, special tax, fee, or charge imposed under this Chapter. (c) A special assessment or special tax must: (1) be levied and collected in the same manner, for the same period or periods, and with the same date or dates of finality as otherwise provided by law; and (2) end when all bonds issued for the district have been paid in full and the County has been fully paid for each infrastructure improvement built or funded by the County. (d) The special assessments, special taxes, fees, or charges authorized under subsection (a) must be payable as otherwise provided by law or (if state and County law are silent) as provided in the resolution adopted under Section 14-9. Any special assessment, special tax, fee, or charge must not be levied until each infrastructure improvement to be financed or refinanced has been approved in the County capital improvements program. (e) The resolution may establish procedures for the prepayment of any special tax, special assessment, fee, or charge levied in the district. The resolution also must, subject to modification by a resolution adopted under Section 14-13: (1) specify (to the extent not already controlled by state or County law) the basis of and any exemptions from any special assessment, special tax, fee, or charge; (2) set a maximum special assessment, special tax, fee, or charge applicable to each individual property in the district; and (3) prohibit any increase in, or extension of the term of, the maximum special assessment, special tax, fee, or charge applicable to any individual property because of any delinquency or default by any other taxpayer. (f) (1) (a) A taxpayer who did not sign a petition under Section 14-6(a), and that taxpayer's successor in interest, may defer any special ad valorem tax on real property imposed to support that debt until the Planning Board approves a plan of subdivision or resubdivision for that taxpayer's property, or, if no subdivision plan is necessary, until the first building permit is issued for any building on the affected property. (2) The Director of Finance and the taxpayer may agree on a payment schedule. (3) The taxpayer must pay interest on any deferred tax at the rate set by law for unpaid real property taxes during each year that taxes are deferred. (g) The County must not allow a credit toward the payment of any development impact tax levied under Chapter 52, or any other tax, fee, or charge, for that part of any infrastructure improvement financed by a development district. (a) except as expressly approved by a Council resolution, a tax imposed under the authorizing law must not pay for that part of the cost of any infrastructure improvement that has: (1) been paid for by any other government agency, or; (2) received a credit toward the payment of the development impact tax or any other tax, fee, or charge; and (b) the County must not allow a credit toward the payment of any development impact tax levied under Chapter 52, or any other tax, fee, or charge, for that part of any infrastructure improvement financed by the special taxing district. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-11. Special Fund.** (a) The resolution creating a special fund under Section 14-9 must: (1) pledge to the special fund the proceeds of any special assessment, special tax, fee, or charge levied under Section 14-10; and (2) require that proceeds from any special tax, special assessment, fee, or charge be paid into the special fund. (b) When any bonds authorized by this Chapter with respect to a development district are outstanding, the County has not been reimbursed for the cost of any infrastructure improvement funded or reimbursed by the County, or the cost of any infrastructure improvement to be paid by the County directly from special assessments or special taxes have not been paid, funds in the special fund must be used in any fiscal year to pay the principal of, interest on, and redemption premium, if any, on the bonds, to pay or reimburse the County for infrastructure improvements, to pay administrative expenses, and to replenish any debt service reserve fund established with respect to the bonds. (c) After the bonds authorized by this Chapter with respect to a development district are fully paid, the County has been reimbursed for the cost of any infrastructure improvement funded or reimbursed by the County, and the cost of any infrastructure improvement to be paid by the County directly from special assessments or special taxes has been paid, further special assessments, special taxes, fees, or charges must not be levied and the district terminates by operation of law. If the Council so determines, any balance in the special fund must be paid to the general fund of the County. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. ### Article IV. Issuing Debt. **Sec. 14-12. Bonds-Payment, Sinking Funds, Reserve Funds, Pledges and Other Financial Guaranties, Proceeds.** (a) If the resolution adopted under Section 14-13 so provides, the Executive must take all necessary actions to issue bonds under this Chapter, subject to the usual and customary requirements and procedures for issuance of special district bonds. (b) Bonds must be payable from the special fund required under Section 14-11 and any other assets or revenues of the district pledged toward their payment. (c) If the resolution adopted under Section 14-9(c) provides for the issuance of bonds, the resolution may authorize the Executive to: (1) establish sinking funds and debt service reserve funds; (2) pledge other assets in and revenues from the district towards the payment of the principal and interest; or (3) arrange for insurance or any other financial guaranty of the bonds. (d) All proceeds received from any bonds issued must be applied solely towards: (1) costs of the infrastructure improvements listed in the resolution adopted under Section 14-9(f)(2); (2) costs of issuing bonds; and (3) payment of the principal and interest on loans, money advances, or indebtedness incurred by the County for any purpose stated in this Chapter. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-13. Resolution; Investment of Special Fund or Sinking Fund; Tax Exemption.** (a) In order to issue bonds, the Council must adopt a resolution that: (1) describes the infrastructure improvements to be financed and states that the County has complied with the procedures in this Chapter; (2) specifies the maximum principal amount of bonds to be issued; (3) covenants to levy special taxes, special assessments, or both, at a rate and amount sufficient in each year when any bonds are outstanding to: (A) provide for the payment of the principal of and interest on the bonds, and the redemption premium, if any, on the bonds; (B) replenish any debt service reserve fund established with respect to the bonds; and (C) enforce the collection of all special assessments and special taxes as provided in Section 52-36, et seq., of the County Code and Section 14-808, et seq., of the Tax Property Article of the Maryland Code, or other applicable law; and (4) specifies (to the extent not already controlled by state or County law) the basis of any special assessment, special tax, fee, or charge in a development district, and any exemptions from a special assessment or special tax subject to any change in law that does not materially impair the district's ability to pay principal and interest and maintain adequate debt service reserves; (5) declares that: (A) the construction of the infrastructure improvements financed by the bonds: (i) creates a public benefit, and special benefits, if applicable, to the properties assessed in the development district; and (ii) serves a public purpose; and (B) the projected special assessment, special tax, fee, or charge revenue will be sufficient to retire the bonds, taking into account the value of land in the district; and (6) (A) prohibits acceleration of assessments or taxes because of any bond default; (B) sets a maximum special assessment, special tax, fee, or charge applicable to each individual property in a development district; and (C) prohibits any increase in, or extension of the term of, the maximum special assessment, special tax, fee, or charge applicable to any individual property because of any delinquency or default by any other taxpayer. (b) To the extent not otherwise required by state law, the resolution may specify, or may authorize the Executive by executive order to specify as needed: (1) the actual principal amount of the bonds to be issued; (2) the actual rate or rates of interest for the bonds; (3) how and on what terms the bonds must be sold; (4) how, when, and where interest on the bonds must be paid; (5) when the bonds may be executed, issued, and delivered; (6) the form and tenor of the bonds, and the denominations in which the bonds may be issued; (7) how, when, and where the principal of the bonds must be paid within the limits in this Section; (8) how any or all of the bonds may be called for redemption before their stated maturity dates; or (9) any other provision not inconsistent with law that is necessary or desirable to finance an infrastructure improvement. (c) The special fund and any sinking fund or reserve fund established by the County to provide for the payment of the principal of or interest on any bonds issued by the County under this Chapter may be invested by the County fiscal officer having custody of the fund in the manner prescribed under Article 95, Section 22 of the Maryland Code. Any fiscal officer having custody of the proceeds of the sale of any such bonds may invest the proceeds, pending their expenditure, as prescribed under Article 95, Section 22. (d) To the extent provided in State law, the principal amount of the bonds, the interest payable on the bonds, their transfer, and any income derived from the transfer, including any profit made in the sale or transfer of the bonds, must be exempt from County taxation of any kind. (e) The adoption of a resolution under this Section does not: (1) obligate the County to issue bonds; or (2) confer any contract, property, or other right on any person. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-14. Form, terms and conditions of bonds.** (a) Any bond may be in bearer form or in coupon form or may be registrable as to principal alone or as to both principal and interest. Each bond is a security as defined in Section 8-102 of the Commercial Law Article of the Maryland Code, whether or not it is either one of a class or series or by its terms is divisible into a class or series of instruments. (b) Each bond must be signed manually or in facsimile by the County Executive, and the seal of the County must be affixed to the bonds and attested by the Clerk of the Council. If any officer whose signature or countersignature appears on the coupons ceases to hold that office before the bonds are delivered, the officer's signature or countersignature is nevertheless valid and sufficient for all purposes as if the officer had remained in office until delivery. (c) Each bond must mature not later than 30 years after issuance. (d) All bonds must be sold in the manner, either at public or private sale, and upon the terms as the County Executive directs. Any contract to acquire property may provide that payment must be made in bonds. Any bond issued under this Chapter is not subject to Article 31, Sections 10 and 11 of the Maryland Code. **Sec. 14-15. Credit of County not Pledged.** (a) Any bond issued under this Chapter is not an indebtedness of the County within the meaning of Section 312 of the Charter. (b) Any bond issued under this Chapter must not pledge the full faith and credit of the County and must state that the full faith and credit of the County is not pledged to pay its principal, interest, or premium, if any. ### Article V. Miscellaneous Provisions. **Sec. 14-16. Administration of district; Termination.** (a) The Executive must administer each district, prepare bond issues, collect taxes and revenues, and oversee construction of infrastructure improvements. Chapter 11B does not apply to: (1) financing, acquiring, or building any infrastructure improvement under this Chapter; or (2) retaining consultants or other professional services in connection with financing any infrastructure improvement or administering any development district. (b) Construction of each infrastructure improvement listed in the resolution creating a district must begin promptly when bond proceeds or other funds are available unless: (1) the approved Capital Improvements Program provides otherwise; or (2) the improvement is being or has already been built. (c) (1) The County may contract with the Revenue Authority or another public agency or a private party, including any owner of property in a development district, to construct or reimburse the cost of any infrastructure improvement when significant cost or time savings have resulted or are likely to result. In a contract under this subsection, the County may reimburse the cost of an infrastructure improvement as it is being built or after construction is complete. (2) However, any reimbursement of construction costs under this subsection must not exceed the lowest of: (A) the unencumbered appropriation available for that item; (B) the actual construction cost of the item; or (C) a fair and reasonable price developed under a cost/price analysis method used by the Office of Procurement. (d) The Executive must designate an employee in the Office of the Executive or the Office of the Chief Administrative Officer as the Development District Coordinator for each development district for which the Council has adopted a resolution declaring its intent to create a development district under Section 14-6. Among other duties, the Coordinator must: (1) coordinate the preparation of the Fiscal Report for the development district as required by Section 14-8; (2) coordinate the financing and development of County infrastructure in that development district; (3) advise the Executive, the Council, the Chief Administrative Officer, County Department heads, the Planning Board, and any other appropriate government agency, of any action needed to expedite the financing and development of County infrastructure in that development district; (4) serve as primary point of contact regarding the financing and development of County infrastructure and associated State and private infrastructure for residents and businesses located or potentially located in or near that development district and the developer of any development located in that development district; and (5) advise the Executive and Council about any other action needed to assure that all required infrastructure keeps pace with private development in that development district. (e) The Executive must report to the Council not later than January 15 and July 15 of each year on the progress made during the preceding 6 months, and the significant steps to be taken during the following 6 months, regarding each development district for which the Council has adopted a resolution under Section 14-6. (f) If the County has not issued any bonds for a district created under this Chapter, or if all bonds issued to finance a district have been repaid, the County has been reimbursed for the cost of any infrastructure improvement funded or reimbursed by the County, and the cost of any infrastructure improvement to be paid by the County directly from special assessments or special taxes has been paid, the Council may terminate the district by resolution approved by the Executive. If the Executive disapproves a resolution within 10 days after it is adopted and the Council readopts it by a vote of 7 Councilmembers, or if the Executive does not act within 10 days after the Council adopts it, the resolution takes effect. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-17. Disclosure; notices.** (a) A seller of real property located in a development district or proposed development district (as defined in subsection (f)) must disclose to any buyer during the life of any development district created under this Chapter: (1) the amount of any special assessment, special tax, fee, or charge which the buyer must pay; or (2) if that amount cannot readily be determined, a method of calculating the amount in sufficient detail to enable the buyer to estimate the maximum amount the buyer will pay currently and during the life of the district. This disclosure must be made in any sale or lot reservation contract. (b) The seller of any property located in a development district or proposed development district (as defined in subsection (f)) must specify in any advertisement, sales brochure, sign, or other sales material that the seller creates or authorizes, that: (1) the property is or would be located in a development district; and (2) any potential buyer should ask the seller about the additional taxes and other charges for which a property owner in the district may be liable. Each sales office and model home in a new housing development located in a development district or proposed development district (as defined in subsection (f)) must prominently display at least one sign that contains the information required under this subsection. The information required under this subsection need not be included in a printed advertisement that is smaller than 16 square inches, or on the initial screen of an internet listing as long as the information appears elsewhere on that listing. (c) A notice in a contract of sale or similar document which prominently contains the heading “Notice of Special Tax or Assessment” and substantially conforms to the following text complies with subsection (a): Each year the buyer of this property must pay a special assessment or special tax imposed under Chapter 14 of the Montgomery County Code, in addition to all other taxes and assessments that are due. As of (date of this contract), the special assessment or special tax on this property amounts to or will not exceed (dollar amount in arabic numbers) each year. As of (date of each scheduled or expected increase), the assessment or tax is scheduled to increase to (amount of each scheduled or expected increase). For further information on this assessment or tax, the buyer can contact the County Department of Finance at (current telephone number). If an increase in any special assessment, special tax, fee, or charge is likely to occur in the forseeable future but the timing or amount of the increase is not certain when the contract is signed, the notice must also expressly disclose that fact. (d) Promptly after the Council adopts a resolution under Section 14-9, the Director of Finance must record among the land records of the County at the cost of the development district a declaration encumbering all real property located in the district and designating that property as subject to a development district. The declaration must terminate when the Director records a release stating that all bonds are fully repaid, the County has been reimbursed for the cost of any infrastructure improvement funded or reimbursed by the County, the cost of any infrastructure improvement to be paid by the County directly from special assessments or special taxes has been paid, and all other obligations of the County relating to the district have been satisfied. While the declaration is in effect, each deed to any real property located in the district must contain a notice that: (1) the property is located in a development district; and (2) a declaration filed in the County land records encumbers the property. (e) The Director of Finance must indicate on the real estate tax bill for each property in a development district the amount of any special assessment or special tax imposed on the property. (f) Any notice or other information that this Section requires a seller to provide for a property located in a development district must also be provided if a development district has not been created but the property is located in an area proposed to be included in a development district by a petition filed under Section 14-6. (g) Any contract which does not disclose all information required by this Section is voidable at the option of the buyer before the date of settlement. (h) In addition to any other applicable remedy or penalty, any person who does not comply with this Section is liable for any damages sustained by a buyer or potential buyer because of that person’s failure to provide any required notice or information. However, a seller or the seller’s agent is not liable for an incorrect estimate of the amount of any tax, assessment, fee, or charge disclosed under this Section if the seller relied in good faith on a method approved or recommended by the County to estimate that amount. (i) The Office of Consumer Protection must enforce this Section as if it were part of Chapter 11. (a) Any amendment to County Code Chapter 14 made in Section 1 of this Act applies to any action taken after this Act take effect. (b) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not alter or affect any Council resolution adopted, or other action taken with respect to a development district, before this Act takes effect. (c) Any amendment to County Code Chapter 14 made in Section 1 of this Act does not indicate that the previous version of a provision amended by Section 1 of this Act should be interpreted differently from the same provision as amended by Section 1 of this Act. (d) Any notice or disclosure requirement in Section 14-17, as amended by Section 1 of this Act, applies to any sale contract signed, and any sales material or advertisement for sale disseminated, after this Act takes effect in any development district created, and in any proposed development district for which the Council adopted a resolution under Section 14-6, after January 1, 2001. **Sec. 14-18. Construction of Chapter.** (a) This Chapter is necessary for the welfare of the County and its residents and must be liberally construed to achieve the purposes stated in Section 14-2. (b) The powers granted under this Chapter supplement any power conferred by any other law and do not restrict any other power of County government.