Section 9-103 - Enterprise zones.
§ 9-103. Enterprise zones.
(a) Definitions.-
(1) In this section the following words have the meanings indicated.
(2) "Base year" means the taxable year immediately before the taxable year in which a property tax credit under this section is to be granted.
(3) (i) "Base year value" means the value of the property used to determine the assessment on which the property tax on real property was imposed for the base year.
(ii) "Base year value" does not include any new real property that was first assessed in the base year.
(4) (i) "Business entity" means a person who operates or conducts a trade or business.
(ii) "Business entity" includes a person who owns, operates, develops, constructs, or rehabilitates real property, if the real property:
1. is intended for use primarily as single or multifamily residential property located in the enterprise zone; and
2. is partially devoted to a nonresidential use.
(5) (i) "Eligible assessment" means the difference between the base year value and the actual value as determined by the Department for the applicable taxable year in which the tax credit under this section is to be granted.
(ii) For a business entity that is located on land or within improvements owned by the federal, State, county, or municipal government, "eligible assessment" means the difference between the base year value and the actual value reduced by the value of any property entitled to an exemption under Title 7 of this article as determined by the Department for the applicable taxable year in which the tax credit under this section is to be granted.
(6) (i) "Qualified property" means real property that is:
1. not used for residential purposes;
2. used in a trade or business by a business entity that meets the requirements of § 5-707 of the Economic Development Article; and
3. located in an enterprise zone that is designated under Title 5, Subtitle 7 of the Economic Development Article.
(ii) "Qualified property" includes personal property on real property that is located in a focus area as defined in § 5-701 of the Economic Development Article.
(b) County or municipal corporation tax.-
(1) The governing body of a county or of a municipal corporation shall grant a tax credit under this section against the property tax imposed on the eligible assessment of qualified property.
(2) In Montgomery County the lessor of real property eligible for a credit under this section shall reduce the amount of taxes for which a tenant is contractually liable under the lease agreement by the amount of any credit allowed under this section that is attributable to improvements made by the tenant.
(c) Enterprise zones in municipal corporations.- Unless the county in which a municipal corporation is located agrees to the designation of an enterprise zone in the municipal corporation, qualified property in the municipal corporation may not receive a tax credit against county property tax.
(d) Amount.-
(1) The appropriate governing body shall calculate the amount of the tax credit under this section equal to a percentage of the amount of property tax imposed on the eligible assessment of the qualified property, as follows:
(i) 80% in each of the 1st 5 taxable years following the calendar year in which the property initially becomes a qualified property;
(ii) 70% in the 6th taxable year;
(iii) 60% in the 7th taxable year;
(iv) 50% in the 8th taxable year;
(v) 40% in the 9th taxable year; and
(vi) 30% in the 10th taxable year.
(2) The Department shall allocate the eligible assessment to the nonresidential part of the qualified property at the same percentage as the square footage of the nonresidential part is to the total square footage of the building.
(3) For purposes of calculating the amount of the credit allowed under this section, the amount of property tax imposed on the eligible assessment shall be calculated without reduction for any credits allowed under this title.
(4) For qualified property located in a focus area, the appropriate governing body shall calculate the amount of the tax credit under this section equal to 80% of the amount of property tax imposed on the eligible assessment of the qualified property for each of the 10 taxable years following the calendar year in which the property initially becomes a qualified property.
(e) Duration.-
(1) A tax credit under this section is available to a qualified property for no more than 10 consecutive years beginning with the taxable year following the calendar year in which the real property initially becomes a qualified property.
(2) Even if the designation of an enterprise zone expires, the tax credit under this section continues to be available to a qualified property.
(3) Notwithstanding § 5-707(d) of the Economic Development Article but subject to § 5-707(b) and (c) of the Economic Development Article, a business entity operating in an enterprise zone when the designation of the enterprise zone expires may claim the credits allowed under this section for real property that:
(i) the business owns, operates, develops, constructs, or rehabilitates within 5 years after the date the designation of the enterprise zone expired; and
(ii) otherwise qualifies for the credits allowed under this section.
(4) State property tax imposed on real property is not affected by this section.
(f) Certification.- When an enterprise zone is designated by the Secretary of the Department of Business and Economic Development, the appropriate governing body shall certify to the Department of Assessments and Taxation:
(1) the real properties in the enterprise zone that are qualified properties for each taxable year for which the property tax credit under this section is to be granted; and
(2) the date that the real properties became qualified properties.
(g) List of properties and assessments.- Before property tax bills are sent, the Department of Assessments and Taxation shall submit to the appropriate governing body a list of:
(1) each qualified property;
(2) the amount of the base year value for each qualified property; and
(3) the amount of the eligible assessment for each qualified property.
(h) Remittance of funds.- As provided in the State budget, the State shall remit to each county or municipal corporation an amount equal to one-half of the funds that would have been collected if the property tax credit under this section had not been granted.
(i) Reimbursements.-
(1) Quarterly or more frequently, the county or municipal corporation shall submit a request to the Department of Assessments and Taxation for the amount required by subsection (h) of this section.
(2) Within 5 working days after the Department of Assessments and Taxation receives the request from the county or municipal corporation, the Department shall certify to the Comptroller the reimbursement due to each county or municipal corporation.
(3) Within 5 working days after the Comptroller receives the certification from the Department, the Comptroller shall reimburse each county or municipal corporation.
[An. Code 1957, art. 81, § 12G-11; 1985, ch. 8, § 2; ch. 618, § 2; 1986, ch. 5, § 4; ch. 171; 1987, ch. 11, § 2; ch. 311, § 1; 1988, ch. 6, §§ 1, 8; 1989, ch. 5, § 1; 1995, ch. 3, § 22; ch. 120, § 19; 1998, ch. 703; 1999, ch. 467; 2000, ch. 61, § 1; ch. 80, § 1; 2006, ch. 362; 2008, ch. 307, § 1; ch. 338, § 2; 2010, ch. 707.]