2016 End of Session Wrap-Up: Tax and Revenue – Economic Development Tax Credit Programs

This post summarizes the status of tax and revenue bills related to economic development tax credit programs that MACo took a position on during the 2016 General Assembly Session.

Manufacturing Tax Credits Fail: HB 450/SB 386 and HB 531/SB 181, two similar manufacturing tax credit bills, would have provided local governments with an economic development tool to help spur manufacturing growth within their jurisdictions by encouraging businesses that have manufacturing facilities outside of the state to locate in Maryland. MACo supported both bills with amendments. Amendments sought on HB 450/SB 386 would have given local governments a more defined role in the designation of a manufacturing empowerment zone, establish broader criteria to be used in the designation of the zone, and provide greater flexibility over the incentives drawn from local revenues – specifically, property tax credits. Amendments sought on HB 531/SB 181 would expand the definition of manufacturing and provide greater flexibility over the incentives drawn from local revenues. Under this bill, local governments determine the zones and apply to the Department of Economic Competitiveness and Commerce for the designation.

Final Status: Both bills were heard in their respective committees (SB 181 and SB 386 – Senate Budget and Taxation; HB 450 and HB 531- House Ways and Means). No further action was taken on either bill.

MACo testimony on SB 386

MACo testimony on SB 181

checkProperty Tax Credits Stay in Effect: HB 1255/SB 843, among other requirements, would have repealed the property tax credit components of the Enterprise Zone (EZ) and Regional Institution Strategic Enterprise (RISE) tax credit programs.  MACo supported the bill with amendments to strike the section that repealed these credits as local governments believe the property tax credits offered by these programs are extremely effective. The Senate passed SB 843 with the language to repeal the credits. However, the House adopted MACo’s amendment to keep the property tax credits intact. A conference committee was appointed to resolve the difference in the House and Senate versions of the bill. The Senate concurred with the House amendments effectively keeping the property tax credits in place for both programs.

Final Status: SB 843 passed the General Assembly and is being reviewed for the Governor’s signature. HB 1255 was heard in the House Ways and Means Committee and no further action was taken.

MACo testimony on SB 843

Rural and Statewide Economic Development Program: SB 737 (rural areas) and SB 738 (statewide) would establish Economic Development Programs to spur economic activity in rural and suburban parts of the state. MACo supported both bills with amendments to provide greater flexibility in determining the amount and duration of the local property tax incentives; establish job creation metrics that are better suited for rural and urban parts of the state; and limit incentives to businesses newly locating and expanding in the state.

Final Status: Both bills were heard in the Senate Budget and Taxation Committee. No further action was taken.

MACo testimony on SB 737 / SB 738

 

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