Title 12. Local Development Authorities and Resources — Subtitle 4. Business Improvement Districts
Statutes in effect as of October 1, 2026.
Md. Code Ann., Econ. Dev. § 12-401 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–401LinkCopy Citation
(a)
In this subtitle the following words have the meanings indicated.
(b)
“Board” means the board of directors of a district corporation.
(c)
“Commercial tenant” means a lessee or other lawful occupant, other than the owner, of nonexempt property within a district.
(d)
“District” means a business improvement district established under this subtitle.
(e)
“District corporation” means a business improvement district corporation formed in accordance with this subtitle.
(f)
“Members of the district” means owners of nonexempt property in the district.
(g)
“Nonexempt property” means nonresidential real property that is not exempt from paying real property taxes.
Md. Code Ann., Econ. Dev. § 12-402 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–402LinkCopy Citation
The legislative purposes of this subtitle are to:
(1)
provide for the creation of business improvement districts; and
(2)
promote the general welfare of the residents, employers, employees, property owners, commercial tenants, consumers, and the general public within the geographic area of the business improvement districts.
Md. Code Ann., Econ. Dev. § 12-402.1 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–402.1LinkCopy Citation
This subtitle does not apply in Montgomery County or Prince George’s County.
Md. Code Ann., Econ. Dev. § 12-403 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–403LinkCopy Citation
(a)
Subject to a public hearing under § 12–408 of this subtitle and to accomplish one or more of the legislative purposes listed in § 12–402 of this subtitle, the legislative body of a county or municipal corporation may adopt a local law to create a business improvement district in accordance with this subtitle.
(b)
Subsection (a) of this section is self–executing and fully authorizes a county or municipal corporation to establish a district, notwithstanding any other statutory or charter provision.
(c)
A local law adopted under subsection (a) of this section shall include:
(1)
the name of the district corporation;
(2)
that the district corporation is formed under this subtitle;
(3)
the names, addresses, and terms of office of the initial members of the board of directors of the district corporation;
(4)
the address of the principal office of the district corporation;
(5)
the purposes for which the district is formed;
(6)
the powers of the district, subject to the limitations on the powers of districts under this subtitle; and
(7)
if applicable, articles of incorporation of the district corporation.
Md. Code Ann., Econ. Dev. § 12-404 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–404LinkCopy Citation
(a)
A board of directors shall govern the district corporation.
(b)
(1)
Subject to paragraph (2) of this subsection, the board of a district corporation consists of five members appointed by the members of the district.
(2)
Appointment procedures shall be provided in the local law establishing the district.
(c)
From among its members, the board shall elect a chair and other officers.
(d)
(1)
Three voting members of the board are a quorum.
(2)
The board may act on a resolution only by the affirmative vote of at least three voting members.
(e)
A member of the board:
(1)
may not receive compensation as a member of the board; but
(2)
shall be reimbursed for expenses incurred in performing the member’s duties.
(f)
The board shall exercise its powers by resolution.
(g)
The board shall file an annual report with the governing body of the county or municipal corporation that includes:
(1)
a financial statement for the preceding year;
(2)
a proposed operating budget for the current fiscal year;
(3)
any proposed revisions to the business plan; and
(4)
a narrative statement or chart showing the results of operations in comparison to stated goals and objectives.
Md. Code Ann., Econ. Dev. § 12-405 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–405LinkCopy Citation
The net earnings of a district corporation may benefit only the district corporation.
Md. Code Ann., Econ. Dev. § 12-406 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–406LinkCopy Citation
(a)
(1)
Except as limited by its articles of incorporation, a district corporation has all the powers set forth in this subtitle.
(2)
A district corporation may:
(i)
receive money from its incorporating county or municipal corporation, the State, other governmental units, or nonprofit organizations;
(ii)
charge fees for its services;
(iii)
have employees and consultants as it considers necessary; and
(iv)
use the services of other governmental units.
(b)
A district corporation shall operate and exercise its powers solely to accomplish one or more of the legislative purposes of this subtitle.
Md. Code Ann., Econ. Dev. § 12-407 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–407LinkCopy Citation
(a)
The owners of nonexempt property who seek to establish a district corporation shall submit appropriate documentation as described in subsection (b) of this section to:
(1)
the governing body of the county in which the proposed district is located; and
(2)
if the proposed district is located within a municipal corporation, the governing body of the municipal corporation.
(b)
The appropriate documentation required under subsection (a) of this section shall contain:
(1)
a statement setting forth:
(i)
the proposed name and address of the district corporation; and
(ii)
the street address of each owner of nonexempt property within the proposed district;
(2)
a statement expressing the intent to establish a district corporation that is signed by at least 80% of the owners of the total number of parcels of nonexempt property in the geographic area of the proposed district;
(3)
a proposed 3–year business plan that contains:
(i)
the goals and objectives of the proposed district;
(ii)
the annual proposed business improvement district tax for the proposed district’s common operations and the formula used to determine each member’s district tax; and
(iii)
the maximum amount and the nature of start–up costs incurred before the district’s establishment;
(4)
a tax assessor’s map of the geographic area of the proposed district;
(5)
a list of the proposed initial board of the proposed district corporation;
(6)
the proposed articles of incorporation and the bylaws of the district corporation;
(7)
for all nonexempt property within the proposed district:
(i)
the name and mailing address of each owner; and
(ii)
the most recent assessed value; and
(8)
a list of the names and addresses of all commercial tenants within the geographic area of the proposed district.
(c)
Within 45 days after receiving all appropriate documentation under subsection (b) of this section, the governing body of a county or municipal corporation shall schedule a public hearing on the application.
Md. Code Ann., Econ. Dev. § 12-408 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–408LinkCopy Citation
(a)
At least 21 days before the public hearing, the governing body of a county or municipal corporation shall publish notice of the public hearing in a newspaper of general circulation within the geographic area of the proposed district.
(b)
At least 21 days before the public hearing, the owners of nonexempt property who seek to establish a district shall send notice of the public hearing and a summary of the application to:
(1)
each owner of nonexempt property within the proposed district; and
(2)
each commercial tenant within the proposed district.
(c)
Before the public hearing, the application shall be made available for review during normal business hours in at least one location in the proposed district.
(d)
Within 10 days after the public hearing, if the governing body of the county or municipal corporation determines that the needs of the district meet the purposes of this subtitle, the governing body shall authorize the district in accordance with § 12–403 of this subtitle.
Md. Code Ann., Econ. Dev. § 12-409 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–409LinkCopy Citation
(a)
Within 10 days after the authorization by the governing body of the county or municipal corporation of the district, the district corporation shall provide the governing body of the county or municipal corporation with a preliminary business improvement district tax roll.
(b)
(1)
The governing body of the county or municipal corporation shall impose a business improvement district tax to provide funds for the operation of the district.
(2)
The governing body of the county or municipal corporation shall impose on members of the district the district tax at a rate specified by the board and approved by the governing body.
(3)
The tax imposed under this subsection may not count against a county or municipal corporation tax cap.
(c)
The district tax shall be collected in the same manner as real property taxes are collected and distributed each quarter to the district.
(d)
A district shall reimburse the governing body of a county or municipal corporation for the costs incurred in collecting the district tax.
Md. Code Ann., Econ. Dev. § 12-410 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–410LinkCopy Citation
An established district may expand the geographic area of the district if:
(1)
a petition for inclusion is submitted from at least 80% of the owners of the total number of parcels of nonexempt property in the geographic area proposed for inclusion in the district;
(2)
the petition under item (1) of this subsection is accepted by a majority vote of the board of the district corporation; and
(3)
the appropriate documents, as applicable, are submitted under § 12–407 of this subtitle and a hearing is held under § 12–408 of this subtitle.
Md. Code Ann., Econ. Dev. § 12-411 (2026)
Title 12. Local Development Authorities and Resources
Subtitle 4. Business Improvement Districts
§ 12–411LinkCopy Citation
(a)
The governing body of a county or municipal corporation in which a district is established under this section shall:
(1)
review the effectiveness and desirability of continuing the district every 3 years from the time the district is authorized by local law under § 12–403 of this subtitle; and
(2)
develop policies and procedures for evaluating the desirability of continuing the district if requested by owners of nonexempt property in the district.
(b)
If the continuing existence of the district is not approved by the governing body:
(1)
the district shall cease to exist as directed by the governing body; and
(2)
the district corporation shall continue its existence only as long as necessary to terminate operation in a reasonable manner.