In this subtitle the following words have the meanings indicated.
“Adjusted assessable base” means the fair market value of real property that qualifies for a farm or agricultural use under § 8–209 of the Tax – Property Article, without regard to the agricultural use assessment for the property as of January 1 of the year preceding the effective date of the resolution creating the development district under § 12–203 of this subtitle.
“Assessable base” means the total assessable base, as determined by the Supervisor of Assessments or the governing body in accordance with § 12–203(b) of this subtitle, of all real property subject to taxation in a development district or a sustainable community.
“Assessment ratio” means a real property tax assessment ratio, however designated or calculated, that is used under applicable general law to determine the assessable base.
“Assessment ratio” includes the assessment percentage specified under § 8–103(c) of the Tax – Property Article.
“Blighted area” means an area in which a majority of buildings have declined in productivity by reason of obsolescence, depreciation, or other causes to an extent that they no longer justify fundamental repairs and adequate maintenance.
“Bond” means a revenue bond, note, or other similar instrument issued in accordance with this subtitle by:
a political subdivision; or
the revenue authority of Prince George’s County.
“Chief executive” means the president, chair, mayor, or other chief executive officer of a political subdivision or the revenue authority of Prince George’s County.
“Development” includes new development, redevelopment, revitalization, and renovation.
“Development district” means a contiguous or noncontiguous area designated by a resolution.
“Development district” includes an extraordinary development district.
“Extraordinary development district” means a development district that:
is designated as such by resolution; and
contains at least 50 acres, on all or part of which a federal law enforcement agency will be located; or
is the site of an immersive entertainment venue.
“Immersive entertainment venue” means an entertainment venue that:
is owned by a private entity;
has at least 3,000 seats;
has an aggregate development cost of at least $500,000,000; and
has an immersive experience with advanced display technology, including 4D visual effects and spherical LED screens.
“Issuer” means a political subdivision or the revenue authority of Prince George’s County that issues a bond under this subtitle.
“MEDCO obligation” means a bond, note, or other similar instrument that the Maryland Economic Development Corporation issues under authority other than this subtitle to finance the cost of infrastructure improvements located in or supporting a transit–oriented development, a sustainable community, a RISE zone, or a State hospital redevelopment.
“Original base” means the assessable base:
as of January 1 of the year preceding the effective date of the resolution creating the development district under § 12–203 of this subtitle; or
if the political subdivision determined the original base in accordance with § 12–203(b) of this subtitle, the base value as established in the resolution.
“Original full cash value” means the dollar amount that is determined by dividing the original base by the assessment ratio used to determine the original base.
“Original taxable value” means for any tax year the dollar amount that is:
the adjusted assessable base, if an adjusted assessable base applies; or
in all other cases, the lesser of:
the product of multiplying the original full cash value by the assessment ratio applicable to that tax year; and
the original base.
“Political subdivision” means a county or a municipal corporation.
“RISE zone” means an area designated as a Regional Institution Strategic Enterprise zone under § 10–140 of this article.
“State hospital redevelopment” means any combination of private or public commercial, residential, or recreational uses, improvements, and facilities that:
is part of a comprehensive coordinated development plan or strategy involving:
property that was occupied formerly by a State facility, as defined in § 10–101 of the Health – General Article, or a State residential center, as defined in § 7–101 of the Health – General Article; or
property that is adjacent or reasonably proximate to property that was occupied formerly by a State facility, as defined in § 10–101 of the Health – General Article, or a State residential center, as defined in § 7–101 of the Health – General Article;
in accordance with design development principles, maximizes use of the property by those constituencies it is intended to serve; and
is designated as a State hospital redevelopment by:
the Smart Growth Subcabinet established under § 9–1406 of the State Government Article; and
the local government or multicounty agency with land use and planning responsibility for the relevant area.
“Sustainable community” has the meaning stated in § 6–201 of the Housing and Community Development Article.
“Sustainable community” includes a portion of a sustainable community.
“Tax increment” means for any tax year the amount by which the assessable base as of January 1 of the preceding tax year exceeds the original base taxable value divided by the assessment ratio used to determine the original taxable value.
“Tax year” means the period from July 1 of a calendar year through June 30 of the next calendar year.
“Transit–oriented development” has the meaning stated in § 7–101 of the Transportation Article.
This subtitle is self–executing.
A political subdivision need not amend its charter to exercise the powers granted by this subtitle.
Except as provided in paragraph (2) of this subsection, this subtitle does not apply in Baltimore City.
The provisions of § 12–203(a)(1)(ii) of this subtitle pertaining to noncontiguous blighted areas apply in Baltimore City.
Before issuing bonds, the governing body of the political subdivision shall:
by resolution:
designate a contiguous area within its jurisdiction as a development district;
designate a noncontiguous blighted area within its jurisdiction as a development district;
identify an area that has been designated a sustainable community; or
identify an area that has been designated a RISE zone;
receive from the Supervisor of Assessments a certification of the amount of the original base, or if applicable, the adjusted assessable base; and
pledge that until the bonds are fully paid, or a longer period, the real property taxes in the development district, a RISE zone, or a sustainable community shall be divided as follows:
the portion of the taxes that would be produced at the current tax rate on the original taxable value base shall be paid to the respective taxing authorities in the same manner as taxes on other property are paid; and
the portion of the taxes on the tax increment that normally would be paid into the general fund of the political subdivision shall be paid into the special fund established under § 12–208 of this subtitle and applied in accordance with § 12–209 of this subtitle.
In this subsection, “brownfields site” has the meaning stated in § 5–301 of this article.
Before issuing bonds and as part of the resolution required under subsection (a) of this section, the governing body of the political subdivision may determine the original base of a brownfields site in a sustainable community.
The determination of the original base of a brownfields site under this section:
is not a determination of the value of the brownfields site; and
may not be used to determine a property tax assessment or appeal of a property tax assessment under the Tax – Property Article.
The establishment or identification by a county of a development district, a RISE zone, or a sustainable community that is wholly or partly in a municipal corporation shall also require a resolution approving the development district, RISE zone, or sustainable community by the governing body of the municipal corporation.
Notwithstanding any limitation of law, an issuer may issue bonds from time to time to finance the development of an industrial, commercial, or residential area.
To issue bonds under this subtitle, the governing body of a political subdivision shall adopt an ordinance that:
describes the proposed undertaking; and
states:
that the governing body has complied with §§ 12-203 and 12-208(c) and (d) of this subtitle;
the maximum principal amount of the bonds; and
the maximum rate of interest on the bonds.
The ordinance may specify the following for bonds issued to carry out the financing of the proposed undertaking:
the principal amount;
the rate of interest;
the manner and terms of sale;
the time of execution, issuance, and delivery;
the form and denomination;
the manner in which, and the times and places at which principal and interest shall be paid;
conditions for redemption before maturity; or
other provisions consistent with this subtitle that the governing body of the political subdivision determines are necessary or desirable.
The revenue authority of Prince George’s County may issue bonds in accordance with an ordinance adopted by the governing body of Prince George’s County.
The ordinance may specify the items listed in subsection (c) of this section or may authorize:
the finance board to specify those items by resolution or ordinance; or
the chief executive to specify those items by executive order.
Except as provided in paragraph (2) of this subsection, neither an ordinance authorizing the bonds nor an ordinance, resolution, or executive order issued, passed, or adopted under this section may be subject to referendum because of any other State or local law.
An ordinance that authorizes the pledge of the full faith and credit of a political subdivision to the payment of principal and interest on a bond is subject to any applicable right to referendum.
A bond:
may be in bearer form;
may be registrable as to principal alone or as to both principal and interest; and
is a “security” under § 8-102 of the Commercial Law Article, whether or not the bond is one of a class or series or is divisible into a class or series of instruments.
A bond shall be signed manually or in facsimile by the chief executive of the issuer.
An officer’s signature or facsimile signature on a bond remains valid even if the officer leaves office before the bond is delivered.
The clerk or other similar administrative officer of the issuer shall attest to and affix to each bond the seal of the issuer.
A bond shall mature not later than 40 years after the date of issue.
The issuer may sell bonds at competitive or negotiated sale in any manner and on any terms that it considers best.
A contract to acquire property may provide that payment shall be made in bonds.
Bonds are exempt from §§ 19–205 and 19–206 of the Local Government Article.
Bonds shall be payable from the special fund established under § 12–208 of this subtitle.
The governing body of the political subdivision or the issuer may:
pledge its full faith and credit or other assets and revenues to pay the bonds; and
establish a sinking fund or a debt service reserve fund for the bonds.
The assets and revenues pledged under subsection (b)(1) of this section may include any amount that the political subdivision may receive from the State under § 2–222 of the Tax – Property Article.
Except as provided in subsections (b) and (e) of this section, bond proceeds may be used only:
to buy, lease, condemn, or otherwise acquire property, or an interest in property:
in the development district, a RISE zone, or a sustainable community; or
needed for a right–of–way or other easement to or from the development district, a RISE zone, or a sustainable community;
for site removal;
for surveys and studies;
to relocate businesses or residents;
to install utilities, construct parks and playgrounds, and for other needed improvements including:
roads to, from, or in the development district;
parking; and
lighting;
to construct or rehabilitate buildings for a governmental purpose or use;
for reserves or capitalized interest;
for necessary costs to issue bonds; and
to pay the principal of and interest on loans, advances, or indebtedness that a political subdivision incurs for a purpose specified in this section.
This subsection applies to a sustainable community identified under § 12–203 of this subtitle.
In addition to the purposes under subsection (a) of this section and without limiting the purposes in subsection (a) of this section, bond proceeds may be used in a sustainable community for:
historic preservation or rehabilitation;
environmental remediation, demolition, and site preparation;
parking lots, facilities, or structures of any type whether for public or private use;
highways as defined in § 8–101 of the Transportation Article or transit service as defined in § 7–101 of the Transportation Article that support sustainable communities;
schools;
affordable or mixed income housing; and
stormwater management and storm drain facilities.
In addition to the purposes listed in subsection (a) of this section, the proceeds from bonds that Prince George’s County or the revenue authority of Prince George’s County issues may be used:
for convention, conference, or visitors’ centers;
for the acquisition, construction, or rehabilitation of an immersive entertainment venue located within an extraordinary development district;
to maintain infrastructure improvements and convention, conference, or visitors’ centers;
to market development district facilities and other improvements; and
for the purpose of encouraging redevelopment in those areas listed in paragraph (2) of this subsection, to install infrastructure improvements, including:
streets;
parking structures of any type whether for public or private use;
utilities;
street lights;
stormwater management and storm drain facilities;
fencing;
noise walls;
retaining walls;
trails;
sidewalks;
pedestrian and vehicular bridges; and
park facilities.
The purpose of the authority granted by paragraph (1)(v) of this subsection is to encourage redevelopment in:
revitalization areas designated by the county;
mixed use centers;
blighted areas; and
the Developed Tier, growth corridors, and growth centers, as defined in the county General Plan.
In addition to the purposes listed in subsection (a) of this section, the proceeds from bonds that a municipal corporation issues may be used for the purpose of encouraging redevelopment in those areas listed in paragraph (2) of this subsection, to install infrastructure improvements, including:
streets;
parking structures of any type whether for public or private use;
utilities;
street lights;
stormwater management and storm drain facilities;
fencing;
noise walls;
retaining walls;
trails;
sidewalks;
pedestrian and vehicular bridges; and
park facilities.
The purpose of the authority granted by paragraph (1) of this subsection is to encourage redevelopment in:
revitalization areas designated by a county or municipal corporation;
mixed use centers;
blighted areas; and
developed areas and growth areas, as defined in a county or municipal corporation land use plan.
This subsection applies to a RISE zone identified under § 12–203 of this subtitle.
In addition to the purposes under subsection (a) of this section and without limiting the purposes in subsection (a) of this section, bond proceeds may be used in a RISE zone for:
historic preservation or rehabilitation;
environmental remediation, demolition, and site preparation;
parking lots, facilities, or structures of any type whether for public or private use;
schools;
affordable or mixed income housing;
stormwater management and storm drain facilities;
innovation centers and laboratory facilities, or structures of any type whether for public or private use, including maintenance and installation of improvements in the structures and services that support the purposes of the RISE zone program; and
any other facilities or structures of any type whether for public or private use that support the purposes of the RISE zone program.
In addition to the purposes listed in subsection (a) of this section, the proceeds from bonds issued by the County Commissioners of Washington County may be used for:
demolition or site removal, including on property that is privately owned and intended to remain privately owned;
pedestrian or vehicular bridges or overpasses, including railroad crossings and related improvements; or
parking lots, facilities, or structures of any type, whether:
publicly or privately owned; or
available for public or private use.
In addition to the purposes listed in subsection (a) of this section, the proceeds from bonds issued by Charles County may be used:
for convention centers, conference centers, or visitors’ centers;
to maintain infrastructure improvements, convention centers, conference centers, or visitors’ centers; and
to market development district facilities and other improvements.
The governing body of a political subdivision may adopt a resolution creating a special fund for a development district, a RISE zone, or a sustainable community even though no bonds:
have been issued for the development district, the RISE zone, or the sustainable community; or
are outstanding at the time of adoption.
The taxes allocated to the special fund in accordance with § 12–203(a)(3)(ii) of this subtitle shall be deposited in the special fund while the resolution that created the special fund remains in effect.
Other than tax revenues received from residential properties in Prince George’s County, the tax collected under § 12–203(a)(3)(ii) of this subtitle is not considered a tax of the political subdivision for the purposes of any constant yield limitation or State or local restriction.
State real property taxes may not be paid into the special fund.
Subject to subsection (c) of this section, the special fund for the development district, the RISE zone, or the sustainable community may be used for any of the following purposes as determined by the governing body of the political subdivision:
a purpose specified in § 12–207 of this subtitle;
accumulated to pay debt service on bonds to be issued later;
payment or reimbursement of debt service, or payments under an agreement described in subsection (b) of this section, that the political subdivision is obliged under a general or limited obligation to pay, or has paid, on or relating to bonds issued by the State, a political subdivision, or the revenue authority of Prince George’s County if the proceeds were used for a purpose specified in § 12–207 of this subtitle; or
payment to the political subdivision for any other legal purpose.
Subject to paragraph (2) of this subsection, the political subdivision that has created a special fund for a development district, a RISE zone, or a sustainable community may pledge under an agreement that amounts deposited to the special fund shall be paid over to secure payment on MEDCO obligations.
The agreement shall:
be in writing;
be executed by the political subdivision making the pledge, the Maryland Economic Development Corporation, and the other persons that the governing body of the political subdivision determines; and
run to the benefit of and be enforceable on behalf of the holders of the MEDCO obligations secured by the agreement.
If bonds are outstanding with respect to a development district, a RISE zone, or a sustainable community, the special fund may be used as described in subsection (a) of this section in any fiscal year only if:
the balance of the special fund exceeds the unpaid debt service payable on the bonds in the fiscal year; and
the special fund is not restricted so as to prohibit the use.
The issuance of bonds pledging the full faith and credit of the political subdivision shall comply with appropriate county or municipal charter requirements.
Subject to paragraph (2) of this subsection, the governing body of a political subdivision that is not the issuer may pledge under an agreement that its property taxes levied on the tax increment shall be paid into the special fund for the development district, a RISE zone, or a sustainable community.
The agreement shall:
be in writing;
be executed by the governing bodies of the issuer and the political subdivision making the pledge; and
run to the benefit of and be enforceable on behalf of any bondholder.
This paragraph applies only in Prince George’s County.
Subject to § 18–310 of the Land Use Article and notwithstanding §§ 18–304, 18–306(d), and 18–307(b) of the Land Use Article, the Maryland–National Capital Park and Planning Commission may enter into an agreement with Prince George’s County to pay all or a portion of the property taxes levied by the county under §§ 18–304, 18–306, and 18–307 of the Land Use Article on the tax increment in an extraordinary development district in the county to the county for deposit into a special fund for the extraordinary development district and to pledge those taxes as security for bonds issued by Prince George’s County.
The agreement authorized under subparagraph (ii) of this paragraph shall:
be in writing; and
be executed by the governing body of Prince George’s County and, on proper authorization, the Maryland–National Capital Park and Planning Commission.
The Maryland–National Capital Park and Planning Commission may not be an obligor for any bonds issued by Prince George’s County for an extraordinary development district.
The governing body of Prince George’s County may also pledge hotel rental tax revenues to the special fund.
The governing body of a political subdivision, including the issuer, may pledge by or under a resolution, including by an agreement with the issuer, as applicable, that alternative local tax revenues generated within, or that are otherwise determined to be attributable to, a development district that is a transit–oriented development, a RISE zone, a sustainable community, or a State hospital redevelopment be paid, as provided in the resolution, into the special fund to:
secure the payment of debt service on bonds or MEDCO obligations; or
be applied to the other purposes stated in § 12–209 of this subtitle.
With the approval by resolution of the governing body of a political subdivision, the Maryland Economic Development Corporation may pledge alternative revenues generated within or otherwise directly attributable to a project located in an approved development district, a transit–oriented development, a RISE zone, a sustainable community, or a State hospital redevelopment.
The revenues pledged in accordance with paragraph (1) of this subsection shall be paid, as provided in the resolution, into the special fund for the development district, transit–oriented development, RISE zone, sustainable community, or State hospital redevelopment to:
secure the payment of debt service on bonds or MEDCO obligations;
support the Strategic Infrastructure Revolving Loan Fund established under § 10–134 of this division; or
be applied to the other purposes stated in § 12–209 of this subtitle.
The principal amount of bonds, interest payable on bonds, the transfer of bonds, and income from bonds, including profit made in the sale or transfer of bonds, are exempt from State and local taxes.
If a political subdivision leases as a lessor its property within a development district, a RISE zone, or a sustainable community:
the property shall be assessed and taxed in the same manner as privately owned property; and
the lease shall require the lessee to pay taxes or payments in lieu of taxes on the assessed value of the entire property and not only on the assessed value of the leasehold interest.
This subtitle does not authorize a county or a municipal corporation to acquire property by eminent domain.
This subtitle may be cited as the Tax Increment Financing Act.