LAWRENCE J. HOGAN, JR., Governor Ch. 449
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Chapter 449
(House Bill 27)
AN ACT concerning
Historic Revitalization Tax Credit and Enterprise Zone Tax Credits – Funding
and Extension Alterations and Eligibility
FOR the purpose of altering certain limitations on a certain credit against the State income
tax for certain commercial rehabilitation projects; establishing the Small
Commercial Project Trust Account within the Historic Revitalization Tax Credit
Reserve Fund; requiring the Governor, in certain fiscal years, to include in the
annual State budget an appropriation of at least a certain amount for the Reserve
Fund and the Trust Account; altering the aggregate amount of initial tax credit
certificates that may be issued for small commercial projects; extending for a certain
number of years the termination date of the tax credit; altering eligibility for and the
calculation of a certain credit against the property tax imposed on certain qualified
property located in certain enterprise zones; and generally relating to the historic
revitalization tax credit tax incentives for improvements to historic and enterprise
zone properties.
BY repealing and reenacting, with amendments,
Article – State Finance and Procurement
Section 5A–303(d), 5A–303(c)(2)(i), (d), (e), and (j)
Annotated Code of Maryland
(2021 Replacement Volume)
BY repealing and reenacting, without amendments,
Article – Tax – Property
Section 9–103(a)(1) and (6) and (b)(1)
Annotated Code of Maryland
(2019 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, with amendments,
Article – Tax – Property
Section 9–103(d) and (e)(1)
Annotated Code of Maryland
(2019 Replacement Volume and 2021 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – State Finance and Procurement
5A–303.
Ch. 449 2022 LAWS OF MARYLAND
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(c) (2) (i) For any commercial rehabilitation, the State tax credit allowed
under this section may not exceed the lesser of:
1. A. [$3,000,000] $5,000,000 for any commercial
rehabilitation other than a Level 1 or Level 2 opportunity zone project;
B. [$3,150,000] $5,250,000 for a Level 1 opportunity zone
project; or
C. [$3,300,000] $5,500,000 for a Level 2 opportunity zone
project; or
2. the maximum amount specified under the initial credit
certificate issued for the rehabilitation.
(d) (1) (I) In this subsection[,] THE FOLLOWING WORDS HAVE THE
MEANINGS INDICATED .
(II) “Reserve Fund” means the Historic Revitalization Tax Credit
Reserve Fund established under paragraph (2) of this subsection.
(III) “TRUST ACCOUNT” MEANS THE SMALL COMMERCIAL
PROJECT TRUST ACCOUNT ESTABLISHED U NDER PARAGRAPH (4) OF THIS
SUBSECTION.
(2) (i) There is a Historic Revitalization Tax Credit Reserve Fund that
is a continuing, nonlapsing special fund that is not subject to § 7–302 of this article.
(ii) The money in the Fund shall be invested and reinvested by the
Treasurer, and interest and earnings shall be credited to the General Fund.
(iii) If the fees paid in any fiscal year are less than the directly related
administrative costs of operating the Historic Revitalization Tax Credit Program, funds in
the Reserve Fund shall be used for the directly related administrative costs of the Program.
(3) (i) Subject to the provisions of this subsection, the Director shall
issue an initial credit certificate for each commercial rehabilitation for which a plan of
proposed rehabilitation is approved and the fees charged under subsection (b)(7)(i) of this
section are paid.
(ii) An initial credit certificate issued under this subsection shall
state the maximum amount of credit under this section for which the commercial
rehabilitation may qualify.
LAWRENCE J. HOGAN, JR., Governor Ch. 449
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(iii) 1. Except as otherwise provided in this subparagraph and in
subsection (b)(7)(v) of this section, for any fiscal year, the Director may not issue initial
credit certificates for credit amounts in the aggregate totaling more than the amount
appropriated to the Reserve Fund for that fiscal year in the State budget as approved by
the General Assembly.
2. If the aggregate credit amounts under initial credit
certificates issued in a fiscal year total less than the amount appropriated to the Reserve
Fund for that fiscal year as a result of the limitation under subsection (b)(6) of this section,
any excess amount may be issued under initial credit certificates for projects in a county or
Baltimore City in the same fiscal year, without regard to the limitation under subsection
(b)(6) of this section.
3. Subject to subsubparagraph 2 of this subparagraph, if the
aggregate credit amounts under initial credit certificates issued in a fiscal year total less
than the amount appropriated to the Reserve Fund for that fiscal year, any excess amount
shall remain in the Reserve Fund and may be issued under initial credit certificates for the
next fiscal year.
4. For any fiscal year, if funds are transferred from the
Reserve Fund under the authority of any provision of law other than paragraph [(4)] (5) of
this subsection, the maximum credit amounts in the aggregate for which the Director may
issue initial credit certificates shall be reduced by the amount transferred.
5. In each fiscal year, the Director shall estimate the amount
of fees to be collected based on the amount appropriated to the Reserve Fund and reserve
the difference between the estimated fees and estimated directly related administrative
costs of the Program to be used to administer the Program.
6. If the reservation of funds to administer the Program
under subsubparagraph 5 of this subparagraph is not necessary to cover the directly related
administrative costs of the Program, any excess amount shall remain in the Reserve Fund
and may be issued under initial credit certificates for the next fiscal year.
(iv) 1. Subject to [subsubparagraph 2] SUBSUBPARAGRAPHS 2
THROUGH 5 of this subparagraph, for each of fiscal years 2018 through [2024] 2031, the
Governor shall include in the budget bill an appropriation to the Reserve Fund.
2. For each of fiscal years 2023 and 2024 THROUGH 2031,
the Governor shall include in the budget bill an appropriation to the Reserve Fund of at
least $12,000,000 $20,000,000.
3. FOR EACH OF FISCAL YE ARS 2025 AND 2026, THE
GOVERNOR SHALL INCLUD E IN THE BUDGET BILL AN APPROPRIATION TO THE
RESERVE FUND OF AT LEAST $24,000,000 $16,000,000.
Ch. 449 2022 LAWS OF MARYLAND
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4. FOR EACH OF FISCAL YE ARS 2027 THROUGH 2031,
THE GOVERNOR SHALL INCLUD E IN THE BUDGET BILL AN APPROPRIATION TO THE
RESERVE FUND OF AT LEAST $36,000,000 $20,000,000.
5. 3. THE AMOUNTS AMOUNT DESCRIBED UNDER
SUBSUBPARAGRAPHS 2 THROUGH 4 SUBSUBPARAGRAPH 2 OF THIS SUBPARAGRAPH
SHALL BE IN ADDITION TO THE APPROPRIATION S TO THE TRUST ACCOUNT
REQUIRED UNDER PARAG RAPH (4) OF THIS SUBSECTION .
(v) Notwithstanding the provisions of § 7–213 of this article, the
Governor may not reduce an appropriation for the Reserve Fund in the State budget as
approved by the General Assembly.
(vi) The Director may not issue an initial credit certificate for any
fiscal year after fiscal year [2024] 2031.
(4) (I) WITHIN THE RESERVE FUND, THERE IS A SMALL
COMMERCIAL PROJECT TRUST ACCOUNT.
(II) 1. THE TRUST ACCOUNT IS ESTABLISHE D FOR THE
ISSUANCE OF TAX CRED IT CERTIFICATES FOR SMALL COMMERCIAL PRO JECTS.
2. FUNDS IN THE TRUST ACCOUNT SHALL BE USED
ONLY FOR TRANSFERS F ROM THE RESERVE FUND TO THE GENERAL FUND IN
ACCORDANCE WITH PARA GRAPH (5) OF THIS SUBSECTION W ITH RESPECT TO TAX
CREDIT CERTIFICATES ISSUED FOR SMALL COM MERCIAL PROJECTS .
(III) THE TRUST ACCOUNT CONSISTS OF :
1. MONEY APPROPRIATED I N THE STATE BUDGET FOR
THE TRUST ACCOUNT; AND
2. ANY OTHER MONEY FROM ANY OTHER SOURCE
ACCEPTED FOR THE BEN EFIT OF THE TRUST ACCOUNT.
(IV) FOR EACH OF FISCAL YE ARS 2024 THROUGH 2031, THE
GOVERNOR SHALL INCLUD E IN THE BUDGET BILL AN APPROPRIATION TO THE
TRUST ACCOUNT OF AT LEAST $4,000,000 $2,000,000.
[(4)] (5) (i) Except as provided in this paragraph, money appropriated
to the Reserve Fund shall remain in the Fund.
LAWRENCE J. HOGAN, JR., Governor Ch. 449
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(ii) 1. Within 15 days after the end of each calendar quarter, the
Trust shall notify the Comptroller as to each commercial rehabilitation completed and
certified during the quarter:
A. the maximum credit amount stated in the initial credit
certificate for the project; and
B. the final certified credit amount for the project.
2. On notification that a project has been certified, the
Comptroller shall transfer an amount equal to the maximum credit amount stated in the
initial credit certificate for the project from the Reserve Fund to the General Fund.
(iii) 1. On or before October 1 of each year, the Trust shall notify
the Comptroller as to the maximum credit amount stated in the initial credit certificate for
each commercial rehabilitation for which the initial credit certificate has expired under
subsection (c)(3) of this section as of the end of the prior fiscal year.
2. On notification that the initial credit certificate for a
project has expired under subsection (c)(3) of this section, the Comptroller shall transfer an
amount equal to the maximum credit amount stated in the initial credit certificate for the
project from the Reserve Fund to the General Fund.
(e) (1) Subject to the provisions of this subsection, the Director shall issue an
initial credit certificate for each approved small commercial project on a first–come,
first–served basis.
(2) An initial credit certificate issued under this subsection shall state the
maximum amount of tax credit for which the applicant is eligible.
(3) (i) [The] BEFORE FISCAL YEAR 2024, THE Director may not issue
an initial credit certificate under this subsection after the aggregate amount of initial credit
certificates issued for small commercial projects totals $5,000,000.
(ii) [For] BEFORE FISCAL YEAR 2024, FOR a targeted project, the
Director may not issue an initial credit certificate under this subsection:
1. after the aggregate amount of initial credit certificates
issued for agricultural structures totals $1,000,000; or
2. after the aggregate amount of initial credit certificates
issued for post–World War II structures totals $1,000,000.
(III) BEGINNING FISCAL YEAR 2024 AND EACH FISCAL YEAR
THEREAFTER , THE DIRECTOR MAY NOT ISSU E INITIAL CREDIT CER TIFICATES FOR
SMALL COMMERCIAL PRO JECTS UNDER THIS SUB SECTION FOR CREDI T AMOUNTS IN Ch. 449 2022 LAWS OF MARYLAND
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THE AGGREGATE TOTALI NG MORE THAN THE AMO UNT OF FUNDS IN THE SMALL
COMMERCIAL PROJECT TRUST ACCOUNT ESTABLISHED U NDER SUBSECTION (D)(4)
OF THIS SECTION.
(j) (1) Subject to the provisions of this subsection, the provisions of this section
and the tax credit authorized under this section shall terminate as of July 1, [2024] 2031.
(2) On and after July 1, [2024] 2031:
(i) the tax credit authorized under this section may be claimed for:
1. a rehabilitation project, other than a commerc ial
rehabilitation, for which an application for approval of a plan of proposed rehabilitation
was received by the Director on or before June 30, [2024] 2031; or
2. a commercial rehabilitation for which an initial credit
certificate has been awarded under subsection (d) of this section; and
(ii) the Director shall continue to report to the Governor and the
General Assembly as required under subsection (i) of this section for as long as any
rehabilitation project for which the tax credit may be claimed remains incomplete.
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read
as follows:
Article – Tax – Property
9–103.
(a) (1) In this section the following words have the meanings indicated.
(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.
LAWRENCE J. HOGAN, JR., Governor Ch. 449
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(b) (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.
(d) (1) [The] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS
SUBSECTION, 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) FOR NEWLY CONSTRUCTED QUALIFIED PROPERTY T HAT
PROVIDES BOTH OFFICE AND RETAIL SPACE AND BECAME ELIGIBLE FOR THE CREDIT
UNDER THIS SECTION O N OR AFTER JANUARY 1, 2019, BUT BEFORE JANUARY 1,
2022, THE APPROPRIATE GOVERNING BODY SHALL CALCULATE THE AMOUNT OF
THE TAX CREDIT UNDER THIS SECTION EQUAL T O A PERCENTAGE OF TH E AMOUNT
OF PROPERTY TAX IMPO SED ON THE ELIGIBLE ASSESSMENT OF THE QU ALIFIED
PROPERTY AS FOLLOWS :
(I) 80% IN EACH OF THE 1ST 8 TAXABLE YEARS FOLLO WING
THE CALENDAR YEAR IN WHICH THE PROPERTY I NITIALLY BECOMES A Q UALIFIED
PROPERTY;
(II) 70% IN THE 9TH TAXABLE YEAR ;
(III) 60% IN THE 10TH TAXABLE YEAR ;
(IV) 50% IN THE 11TH TAXABLE YEAR ;
(V) 40% IN THE 12TH TAXABLE YEAR ; AND
(VI) 30% IN THE 13TH TAXABLE YEAR .
Ch. 449 2022 LAWS OF MARYLAND
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[(2)] (3) 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)] (4) 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)] (5) 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:
(I) FOR NEWLY CONSTRUCTE D QUALIFIED PROPERTY THAT
PROVIDES BOTH OFFICE AND RETAIL SPACE AND BECAME ELIGIBLE FOR THE CREDIT
UNDER THIS SECTION O N OR AFTER JANUARY 1, 2019, BUT BEFORE JANUARY 1,
2022, FOR EACH OF THE 13 TAXABLE YEARS FOLLOW ING THE CALENDAR YEAR IN
WHICH THE PROPERTY I NITIALLY BECOMES A Q UALIFIED PROPERTY ; OR
(II) FOR ANY OTHER QUALIF IED PROPERTY , for each of the 10
taxable years following the calendar year in which the property initially becomes a qualified
property.
(e) (1) A tax credit under this section is available to a qualified property for no
more than 10 consecutive years OR, IN THE CASE OF NEWLY CONSTRUCTED QUALIFIE D
PROPERTY THAT PROVIDES BOTH OFFICE AND RETAIL SPACE AND BECAME ELIGIBLE
FOR THE CREDIT UNDER THIS SECTION ON OR AFTER JANUARY 1, 2019, BUT BEFORE
JANUARY 1, 2022, NO MORE THAN 13 CONSECUTIVE YEARS , beginning with:
(i) the taxable year following the calendar year in which the real
property initially becomes a qualified property; or
(ii) the taxable year in which the real property initially becomes a
qualified property, subject to the approval of the appropriate local governing body and the
Secretary of Commerce.
SECTION 3. AND BE IT FURTHER ENACTED, That Section 1 of this Act shall be
applicable to all taxable years beginning after December 31, 2021.
SECTION 4. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall be
applicable to all taxable years beginning after June 30, 2022.
SECTION 2. 5. AND BE IT FURTHER ENACTED, That this Act s hall take effect
July June 1, 2022.
Approved by the Governor, May 16, 2022.