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Press Releases - County Council

Council unanimously overrides veto of Bill 38-20 reaffirming its commitment to investing in Montgomery County's future

For Immediate Release: Tuesday, December 8, 2020

ROCKVILLE, Md., Dec. 8–Today the Council reaffirmed its commitment to investing in Montgomery County's future by unanimously overriding County Executive Elrich's veto of Bill 38-20, Taxation - Development Impact Taxes for Transportation and Public School Improvements - Amendments. When the Council approved Montgomery County's 2020-2024 Growth and Infrastructure Policy on Nov. 16, it eliminated the residential building moratorium to help generate housing in areas where development was restricted and approved several legislative measures aimed at enhancing the county’s economic competitiveness in the Washington metropolitan region.

Bill 38-20, which is companion legislation to the new Growth and Infrastructure Policy, reduces impact taxes and provides discounts in targeted areas to help spur new investment and housing development. New investment and development would create good paying jobs and generate more affordable housing for residents and ultimately expand the county's overall tax base.

“We must take bold steps to set our community up to thrive over the long term as we emerge from this pandemic,” Council President Tom Hucker said. “We're committed to doing what is necessary to meet the region's ambitious housing goal, which is needed to sustain economic growth and improve our quality of life. Bill 38-20 will make our community more desirable, spur much-needed housing construction, create high-paying jobs and more affordable places for our residents to live.”

“While the County Executive continues opposing change and development as he has for decades, this Council passed a comprehensive new Growth and Infrastructure Policy that carefully balances the competing needs to address school enrollment, make our transportation system safer and more efficient, open our doors to economic development and allow badly-needed new housing,” said Councilmember Hans Riemer, chair of the Planning, Housing and Economic Development Committee. “I am grateful to my colleagues, the Planning Board and staff, and all the community members who participated to make this process a success.”

“Now more than ever, we must jumpstart and grow our economy by creating jobs, building more housing and creating activity centers,” said Councilmember Nancy Navarro, chair of the Government Operations and Fiscal Policy Committee. “The changes in Bill 38-20 will go a long way to help us shift the narrative about Montgomery County’s approach to economic development. We must be willing to take bold and strategic steps to expand our revenues in order to address our growing needs.”

The Metropolitan Washington Council of Governments has estimated that the region needs to increase the number of planned housing units by at least 320,000 units between 2020 and 2030 to sustain economic growth and improve quality of life for area residents. Market forces have proven that Montgomery County will not reach its housing goals by sticking with antiquated land use policies that no longer meet the needs of the community.

“The changes made in the Growth and Infrastructure Policy will pave the way for more fair and equitable growth across Montgomery County,” said Councilmember Evan Glass. “This policy is the result of more than 19 Council and committee work sessions combined, and while I did not support every component, I do believe it reflects our values of inclusivity and diversity. Montgomery County is a wonderful place to live and will continue being so for generations to come.”

“I'm disappointed that the County Executive has once again rejected a tangible and data-driven step to encourage new transit-oriented housing that will make our county more welcoming to new residents, more attractive to new businesses, and more competitive in the region,” said Councilmember Andrew Friedson. “I'm pleased the Council acted to swiftly override this veto and continue turning rhetoric on affordable housing, environmental sustainability and economic development into reality.”

Bill 38-20 amends the transportation and school impact tax district designations and the impact tax rates that apply in these districts. The bill provides that the county will calculate the school impact taxes at 100 percent of the cost of a student seat in school impact areas using student generation rates. This rate more accurately reflects the true cost of school facilities.

The legislation also provides a discount in desired growth and investment areas for transportation impact taxes to incentivize growth in targeted areas that may otherwise be overlooked. Finally, the bill exempts development in a Qualified Opportunity Zone from impact taxes and provides a 60 percent impact-tax credit for three-bedroom units in infill school impact areas because there is a lack of this type of housing in the county.

Today the Council also approved a resolution to establish Utilization Premium Payment rates for public school improvements. The rates in the resolution reflect the recommendations of the Council as an outcome of its review of the Growth and Infrastructure Policy and Bill 38-20. The Council approved three utilization thresholds at which a Utilization Premium Payment (UPP) must be paid.

In any school service area with a utilization rate of 105 percent and less than 120 percent, a UPP equal to 40 percent of the portion of the applicable impact tax for the inadequate school level would apply. In any school service area with a utilization rate of 120 percent and less than 135 percent, a UPP equal to 80 percent of the portion of the applicable impact tax for the inadequate school level would apply. In any school service area with a utilization rate of 135 percent or higher, a UPP equal to 120 percent of the portion of the applicable impact tax for the inadequate school level would apply.

Release ID: 20-488
Media Contact: Sonya Healy, 240-777-7926 , Juan Jovel 240-777-7931