EXPLANATION: CAPITALS indicate matter added to existing law.
[Brackets] indicate matter deleted from existing law.
* WARNING: THIS IS AN UNOFFICIAL, INTRODUCTORY COPY OF THE BILL.
THE OFFICIAL COPY CONSIDERED BY THE CITY COUNCIL IS THE FIRST READER COPY.
INTRODUCTORY*
CITY OF BALTIMORE
COUNCIL BILL
Introduced by: The Council President
At the request of: The Administration (Department of Finance)
A BILL ENTITLED
AN ORDINANCE concerning
title
Tax Credits - Historic Properties - Calculations
FOR the purpose of amending the City Code provisions that govern the tax credit for historic improvements, restorations, and rehabilitations to incorporate new requirements enacted by Chapters 193 and 194, 2014 Acts of the General Assembly; requiring a certain calculation and value to be determined by the State Department of Assessments and Taxation and a certain calculation and value to be determined by certain professional appraisers; defining certain additional terms; correcting, clarifying, conforming, and reorganizing related language and provisions; and generally relating to a property tax credit for historic properties.
body
BY repealing and reordaining, with amendments
Article 28 - Taxes
Section(s) 10-8
Baltimore City Code
(Edition 2000)
SECTION 1. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF BALTIMORE, That the Laws of Baltimore City read as follows:
Baltimore City Code
Article 28. Taxes
Subtitle 10. Credits
§ 10 8. Historic IMPROVEMENTS, restorations, and rehabilitations.
(a) Definitions.
(1) IN GENERAL.
In this section, the following words have the meanings indicated.
(2) CHAP.
"CHAP" MEANS THE COMMISSION FOR HISTORICAL AND ARCHITECTURAL PRESERVATION OR THE COMMISSION'S DESIGNEE.
(3) ELIGIBLE IMPROVEMENTS.
[(2)] "Eligible improvements" means significant improvements to[, or restoration or rehabilitation of, historic properties] AN HISTORIC PROPERTY.
(4) HISTORIC PROPERTY.
"HISTORIC PROPERTY" MEANS A PROPERTY:
(I) INDIVIDUALLY LISTED ON THE NATIONAL REGISTER OF HISTORIC PLACES;
(II) INDIVIDUALLY LISTED ON THE CITY LANDMARK LIST;
(III) LOCATED WITHIN A NATIONAL REGISTER HISTORIC OR LANDMARK DISTRICT AND CERTIFIED BY CHAP AS CONTRIBUTING TO THE HISTORIC SIGNIFICANCE OF THAT DISTRICT; OR
(IV) LOCATED WITHIN A CITY HISTORICAL AND ARCHITECTURAL PRESERVATION DISTRICT AND CERTIFIED BY CHAP AS CONTRIBUTING TO THE HISTORIC SIGNIFICANCE OF THAT DISTRICT.
(5) SIGNIFICANT IMPROVEMENTS.
[(3)] "Significant improvements" means [a] IMPROVEMENTS, RESTORATION, OR rehabilitation FOR WHICH the total DOCUMENTED CONSTRUCTION cost [of which] equals or exceeds 25% of a property's full cash value [prior to] BEFORE COMMENCEMENT OF THE IMPROVEMENTS, RESTORATION, OR rehabilitation [as reflected in the assessment records].
(b) Program goal.
The goal of this program is to help preserve Baltimore's neighborhoods by encouraging home and business owners to make special efforts to restore or rehabilitate historic buildings.
(c) Credit granted.
In accordance with [the provisions of] State Tax Property Article § 9 204.1, [there is hereby granted] a 10-YEAR tax credit IS GRANTED against the [Baltimore] City real property tax [imposed on] ATTRIBUTABLE TO eligible improvements [to] OF historic properties.
(D) CHAP APPROVAL REQUIRED.
THE TAX CREDIT GRANTED BY THIS SECTION APPLIES ONLY TO ELIGIBLE IMPROVEMENTS THAT, BEFORE THE IMPROVEMENTS ARE BEGUN, HAVE BEEN PRELIMINARILY APPROVED BY CHAP AS MEETING LOCAL HISTORIC PRESERVATION STANDARDS.
(E) [(d)] Amount of credit - IN GENERAL.
(1) CALCULATION ADJUSTMENTS.
[Subject] THE CALCULATIONS SPECIFIED IN PARAGRAPHS (2) AND (3) OF THIS SUBSECTION ARE subject to:
(I) the [limitations imposed] REDUCTION REQUIRED by paragraph [(2)] (5) of this subsection; and
(II) THE LIMITATIONS IMPOSED by:
(A) PARAGRAPH (6) OF THIS SUBSECTION; AND
(B) subsection [(g)] (F) of this section[, the property tax credit granted under this section shall equal the difference between:].
[(i) the property tax that, but for the tax credit, would be payable after the completion of the eligible improvements; and]
[(ii) the property tax that would be payable if the eligible improvements were not made.]
(2) CREDITS INITIALLY GRANTED BEFORE OCTOBER 1, 2014.
(I) FOR CREDITS INITIALLY GRANTED UNDER THIS SECTION BEFORE OCTOBER 1, 2014, AND FOR THE DURATION OF THE CREDIT, THE CREDIT IS EQUAL TO THE DIFFERENCE BETWEEN:
(A) THE REAL PROPERTY TAX ON THE MOST RECENT FULL CASH VALUE OF THE PROPERTY BEFORE THE COMMENCEMENT OF ELIGIBLE IMPROVEMENTS; AND
(B) THE REAL PROPERTY TAX ON THE MOST RECENT FULL CASH VALUE OF THE PROPERTY AFTER COMPLETION OF THE ELIGIBLE IMPROVEMENTS.
(II) FOR PURPOSES OF THIS CALCULATION, THE FULL CASH VALUE OF THE PROPERTY IS THE FULL CASH VALUE BEFORE PHASE IN, AS DETERMINED BY THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION THROUGH THE ASSESSMENT PROCEDURES ESTABLISHED UNDER TAX-PROPERTY ARTICLE, TITLE 8, OF THE MARYLAND CODE.
(3) CREDITS INITIALLY GRANTED ON OR AFTER OCTOBER 1, 2014.
(I) FOR CREDITS INITIALLY GRANTED UNDER THIS SECTION ON OR AFTER OCTOBER 1, 2014, AND FOR THE DURATION OF THE CREDIT, THE CREDIT IS EQUAL TO THE DIFFERENCE BETWEEN:
(A) THE REAL PROPERTY TAX ON THE FULL CASH VALUE OF THE PROPERTY BEFORE THE COMMENCEMENT OF ELIGIBLE IMPROVEMENTS; AND
(B) THE REAL PROPERTY TAX ON THE FULL CASH VALUE OF THE PROPERTY AFTER COMPLETION OF THE ELIGIBLE IMPROVEMENTS.
(II) FOR PURPOSES OF THIS CALCULATION, THE FULL CASH VALUE OF THE PROPERTY SHALL BE DETERMINED BY AN APPRAISAL OF THE PROPERTY BEFORE COMMENCEMENT AND AFTER COMPLETION OF ELIGIBLE IMPROVEMENTS BY A PROFESSIONAL APPRAISER SELECTED BY THE CITY AND LICENSED UNDER BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE, TITLE 16, SUBTITLE 3, OF THE MARYLAND CODE.
(4) NOTWITHSTANDING PARAGRAPH (3) OF THIS SUBSECTION, IF A PROPERTY RECEIVED PRELIMINARY APPROVAL UNDER SUBSECTION (D) OF THIS SECTION BEFORE OCTOBER 1, 2014, THE CREDIT SHALL BE CALCULATED IN ACCORDANCE WITH PARAGRAPH (2) OF THIS SUBSECTION.
(5) [(2)] The credit calculated under [paragraph (1) of] this subsection shall be reduced by the amount of the credit, if any, for which the property is eligible under the Maryland Enterprise Zone Tax Credit Program.
(6) NO PART OF THE CREDIT CALCULATED UNDER THIS SUBSECTION MAY BE APPLIED IN ANY TAX YEAR:
(I) TO REDUCE THE PROPERTY'S TAX LIABILITY FOR THAT TAX YEAR, AFTER APPLICATION OF ANY OTHER APPLICABLE CREDIT, TO LESS THAN THE TAX LIABILITY TO WHICH THE PROPERTY WAS SUBJECT, AFTER APPLICATION OF ANY OTHER APPLICABLE TAX CREDIT, BEFORE COMMENCEMENT OF THE ELIGIBLE IMPROVEMENTS; OR
(II) IN ANY CASE IN WHICH THE PROPERTY'S TAX LIABILITY FOR THAT TAX YEAR, AFTER APPLICATION OF ANY OTHER APPLICABLE CREDIT, IS LESS THAN THE TAX LIABILITY TO WHICH THE PROPERTY WAS SUBJECT, AFTER APPLICATION OF ANY OTHER APPLICABLE TAX CREDIT, BEFORE COMMENCEMENT OF THE ELIGIBLE IMPROVEMENTS.
(F) [(g)] AMOUNT OF CREDIT - [Projects exceeding] LIMITATION ON PROJECTS OF MORE THAN $3.5 million [in development] DOCUMENTED CONSTRUCTION costs.
(1) For development projects exceeding $3.5 million in DOCUMENTED construction costs, the tax credit [shall be] IS limited to the following percentages of the amount computed under subsection [(d)] (E) of this section:
(i) in years 1 through 5 80%
(ii) in year 6 70%
(iii) in year 7 60%
(iv) in year 8 50%
(v) in year 9 40%
(vi) in year 10 30%.
(2) To be eligible for this limited tax credit:
(i) the developer must:
(A) submit all documents requested by the FINANCE Director; and
(B) submit documentation reviewed by the developer with the State Department of Assessments and Taxation to support a preliminary estimate of value for tax purposes based on construction costs and projected income; and
(ii) either:
(A) the existing building in question must have been at least 75% vacant for at least 3 years; or
(B) the developer must otherwise demonstrate to the FINANCE Director [of Finance] that the credit is necessary in order for the project to proceed.
(3) At the time of application for the credit, the developer must submit a statement of projected economic impact and public benefits for the project. 3 years from the date an application is accepted, the developer must submit statements of actual economic impact and public benefits for the project. Public benefit measures include neighborhood revitalization impact, job creation, tax generation, and minority business development.
(4) If the property is located in a Maryland Enterprise Zone, the credit under this section may be taken only for those parts of the property that have been rejected as ineligible for the enterprise zone tax credit.
(5) NO PART OF THE CREDIT CALCULATED UNDER THIS SUBSECTION MAY BE APPLIED IN ANY TAX YEAR:
(I) TO REDUCE THE PROPERTY'S TAX LIABILITY FOR THAT TAX YEAR, AFTER APPLICATION OF ANY OTHER APPLICABLE CREDIT, TO LESS THAN THE TAX LIABILITY TO WHICH THE PROPERTY WAS SUBJECT, AFTER APPLICATION OF ANY OTHER APPLICABLE TAX CREDIT, BEFORE COMMENCEMENT OF THE ELIGIBLE IMPROVEMENTS; OR
(II) IN ANY CASE IN WHICH THE PROPERTY'S TAX LIABILITY FOR THAT TAX YEAR, AFTER APPLICATION OF ANY OTHER APPLICABLE CREDIT, IS LESS THAN THE TAX LIABILITY TO WHICH THE PROPERTY WAS SUBJECT, AFTER APPLICATION OF ANY OTHER APPLICABLE TAX CREDIT, BEFORE COMMENCEMENT OF THE ELIGIBLE IMPROVEMENTS.
(G) [(e)] Additional requirements.
A [property tax] credit [granted] under this section [shall]:
(1) [be] IS subject to eligibility requirements no less stringent than those applicable to credits authorized under [State] Tax Property Article § 9 204, OF THE MARYLAND CODE;
(2) [be for] IS LIMITED TO a period of 10 CONSECUTIVE TAX years (OR PORTION OF A TAX YEAR) [for each property, starting with the next assessment beginning after restoration is completed], BEGINNING WITH THE FIRST BILLING PERIOD THAT OCCURS AFTER CHAP AND THE FINANCE DIRECTOR HAVE ISSUED THEIR FINAL APPROVALS;
[(3) apply to eligible improvements which:]
[(i) are located within the boundaries of:]
[(A) a property listed individually on the National Register of Historic Places, or a National Register Historic or Landmark District; or]
[(B) a property or district designated as an historic property or district under City law; and]
[(ii) have been determined by the Commission for Historical and Architectural Preservation to be compatible with local historic preservation standards, and have been approved by the Commission prior to work beginning;]
[(iii) may include documented costs for interior rehabilitation;]
(3) [(4) be] IS fully transferrable to a new owner for the remaining life of the credit; and
(4) [terminate] TERMINATES if the property is converted so as [not] to NO LONGER meet established historic preservation standards [during the credit period].
(H) [(f)] Continuing eligibility.
[The] DURING THE CREDIT PERIOD, THE property owner shall:
(1) maintain the major historic features of the property;
(2) ensure that the property for which the credit was granted is in full compliance with the Building, Fire, and Related Codes of Baltimore City; and
(3) submit all statements required by subsection [(g)(3)] (F)(3) of this section.
[(h) Eligible areas.]
[Eligible areas include Baltimore City Historic Districts, Baltimore City Historic Landmarks, National Register Historic Districts, and National Register Historic Landmarks.]
(i) No tax subsidy duplication allowed.
Except for the Maryland State Enterprise Zone Tax Credit Program, the [historic property tax] credit AUTHORIZED BY THIS SECTION does not apply to any property for which any other tax subsidy from the City, whether in the form of a tax credit, payment in lieu of taxes, or otherwise, is being received or has been applied for.
(j) Application.
(1) [The] A PROPERTY owner SEEKING THIS CREDIT shall:
(I) file an application [for this tax credit] with [the Commission for Historical and Architectural Preservation] CHAP; and
(II) pay the application fee [as] set by the Board of Estimates.
[If the property is transferred, the new owner shall file an application in order to continue the credit.]
(2) The application [for the tax credit] shall contain THE information, including identification of major historic features, that [the Commission for Historical and Architectural Preservation] CHAP considers necessary for determining the eligibility of the applicant.
[(3) The application shall include evidence of use and occupancy in the case of previously vacant properties.]
(k) Administration.
The FINANCE Director [of Finance] may:
(1) adopt rules and regulations to [implement the provisions of] CARRY OUT this section;
(2) settle ANY disputed claims that may arise in connection with the credit authorized by this section; and
(3) delegate HIS OR HER powers[,] AND duties [or functions in connection with the administration of the credit authorized by] TO ADMINISTER this section to [the City Collector or] any [other] employee OR AGENCY of the City.
(l) Review.
(1) [The Commission for Historical and Architectural Preservation] CHAP, in coordination with the Department of Finance, shall establish review procedures for the CREDIT program ESTABLISHED BY THIS SECTION.
(2) The Department of Finance shall analyze THE data submitted [by developers in the statements required by] UNDER subsection [(g)(3)] (F)(3) of this section.
(m) Termination of program.
Applications for [the] A credit UNDER THIS SECTION may not be accepted after February 29, 2016.
SECTION 2. AND BE IT FURTHER ORDAINED, That the catchlines contained in this Ordinance are not law and may not be considered to have been enacted as a part of this or any prior Ordinance.
SECTION 3. AND BE IT FURTHER ORDAINED, That this Ordinance takes effect on October 1, 2014.
dlr14-882(6)~intro/11Jun14
art28/HistoricTxCrdt-Calculation/aa:me
dlr14-882(6)~intro/11Jun14
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