MACo: Punitive Remedies Jeopardize Economic Growth

MACo Legislative Director Kevin Kinnally this week testified in opposition to SB 306 Enterprise Zones – Reimbursements to Local Governments – Request Deadline and Recovery of Overpayment before the Senate Budget and Taxation Committee.

This bill would needlessly undermine the State’s commitment to the Enterprise Zone (EZ) program by granting the State Department of Assessments and Taxation (SDAT) arbitrary authority to permanently deny reimbursements owed to local governments for foregone property tax revenues under the program.

From the MACo Testimony:

The Maryland Association of Counties (MACo) OPPOSES SB 306. This bill would needlessly
undermine the State’s commitment to the Enterprise Zone (EZ) program by granting the State
Department of Assessments and Taxation (SDAT) arbitrary authority to permanently deny
reimbursements owed to local governments for foregone property tax revenues under the program.
These punitive remedies jeopardize an important and effective program.

The EZ program brings together state and local resources to encourage economic growth and create
jobs. Businesses located within these areas are eligible for local property tax credits and state income
tax credits. SDAT reimburses local governments for 50 percent of foregone revenues for property tax
credits issued under the program. While SDAT requires local governments to meet an administrative
filing deadline in order to be eligible for such reimbursements, applications could be delayed as a result
of untimely appraisal data from SDAT, unpunctual reports from eligible businesses, or lengthy
assessment appeals.

By requiring SDAT to foreclose on reimbursement requests not made within the 10 months following
the June 30 administrative filing deadline, SB 306 fails to recognize that such delayed requests are likely
beyond the control of local governments. This bill lacks an appropriate remedy to hold SDAT
accountable for failing to provide accurate and timely assessment data, which is necessary in order to
meet the application deadline.

Follow MACo’s advocacy efforts during the 2021 legislative session on MACo’s Legislative Tracking Database.

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