On February 4, Legislative Director Kevin Kinnally testified before the Ways and Means Committee to support HB 342 – State Transfer Tax – Rates and Distribution of Revenue with amendments.
This bill alters the state transfer tax rate and modifies the distribution of transfer tax revenue.
Following the bill’s primary intent (to create upper “brackets” for the state transfer tax), the bill then introduces a provision requiring the Comptroller to calculate 28% of the remaining transfer tax revenue and adjust the distribution based on a five-year average. If this amount falls below the average, the Comptroller must modify the allocation, with the balance directed to the General Fund.
MACo is concerned that this mechanism could diminish dedicated funding for local POS and other critical land conservation programs, which rely on transfer tax revenue for stability and long-term planning. As such, counties request amendments to protect dedicated funding for land preservation, conservation, and recreation programs from unintended revenue shifts. A clearer “hold harmless” based on actual transactions rather than historical averages would best effectuate this vital protection for current land preservation and related efforts.
While MACo recognizes the bill’s aim to create a more equitable and structured tax system, the Association is concerned about potential unintended consequences for existing land preservation programs, such as Program Open Space (POS). Counties would recommend a firmer “hold harmless” calculation in the bill.
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