LAWRENCE J. HOGAN, JR., Governor Ch. 732
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Chapter 732
(House Bill 478)
AN ACT concerning
Economic Development – Enterprise Zone Program – Alterations
FOR the purpose of establishing the purpose of the Enterprise Zone Program; altering the
circumstances under which the Secretary of Commerce may designate an area as an
enterprise zone or a focus area; prohibiting the Secretary from designating a new
enterprise zone or granting an expansion of an existing enterprise zone under certain
circumstances; altering a certain limitation on the expansion of an existing
enterprise zone during a single calendar year; altering the circumstances under
which the Secretary may grant an extraordinary expansion of an enterprise zone;
altering the State agencies responsible for assessing the effectiveness of certain tax
credits provided to certain business entities in enterprise zones; requiring the State
Department of Assessments and Taxation and the Comptroller to submit to the
Department of Commerce a certain report; requiring each county within which an
enterprise zone is located to submit to the Department of Commerce a certain report;
requiring the Department of Commerce to provide certain notification to a county
under certain circumstances; requiring the Department of Commerce to develop
certain metrics and a framework for analyzing certain matters; altering the
definitions of certain employees for purposes of determining eligibility for a certain
credit against the State income tax; limiting the amount of a certain credit against
the State income tax that may be claimed by a business entity each taxable year;
limiting the total amount of credits against the State income tax that certain
business entities may claim each taxable year; providing that, for any taxable year,
the amount of a certain credit against the property tax imposed on certain qualified
property may not exceed a certain amount; providing for the termination of the
Enterprise Zone Program and, except under certain circumstances, eligibility for
certain tax credits provided under the Program; and generally relating to the
Enterprise Zone Program.
BY repealing and reenacting, with amendments,
Article – Economic Development
Section 5–702, 5–704(a)(2) and (4) and (b) 5–704(a)(4), 5–705, 5–706, 5–707(d), and
5–709
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, without amendments,
Article – Economic Development
Section 5–704(a)(1) and 5–707(a) and (d) and (d)
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
Ch. 732 2022 LAWS OF MARYLAND
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BY adding to
Article – Economic Development
Section 5–710
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, with amendments,
Article – Tax – General
Section 10–702
Annotated Code of Maryland
(2016 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, without amendments,
Article – Tax – Property
Section 9–103(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)
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 – Economic Development
5–702.
(A) THE PURPOSE OF THE EN TERPRISE ZONES AUTHO RIZED UNDER THIS
SUBTITLE IS TO ATTRA CT, RETAIN, AND ENCOURAGE COMMER CIAL DEVELOPMENT
IN ECONOMICALLY DIST RESSED AREAS OF THE STATE, IN PARTNERSHIP WITH
POLITICAL SUBDIVISIO NS, BY INCENTIVIZING CAP ITAL INVESTMENT AND JOB
CREATION THROUGH REA L PROPERTY AND INCOM E TAX CREDITS.
(B) Subject to § 9–103 of the Tax – Property Article, a business entity that owns,
operates, develops, constructs, or rehabilitates property intended for use primarily as single
or multifamily residential property located in an enterprise zone may not benefit from an
incentive or initiative under this subtitle.
5–704.
(a) (1) The Secretary may only designate an area as an enterprise zone if the
area: LAWRENCE J. HOGAN, JR., Governor Ch. 732
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(i) in a priority funding area or in a qualified opportunity zone
under § 1400Z–1 of the Internal Revenue Code in Allegany County, Garrett County,
Somerset County, or Wicomico County or meets an exception under Title 5, Subtitle 7B of
the State Finance and Procurement Article; and
(ii) satisfies at least one of the requirements specified in paragraph
(2) of this subsection.
(2) An area may be designated as an enterprise zone if:
(i) the average rate of unemployment in EACH CENSUS TRACT
WITHIN the area, or within a reasonable proximity to the area but in the same county IF
FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT, for the most recent
18–month period for which data are available is at least 150% of the greater of the average
rate of unemployment in either the State or the United States during that period;
(ii) the population in EACH CENSUS TRACT WI THIN the area, or
within a reasonable proximity to the area but in the same county IF FEWER THAN 1,500
INDIVIDUALS RESIDE I N THE CENSUS TRACT , qualifies the area as a low–income poverty
area;
(iii) at least 70% of the families in EACH CENSUS TRACT WI THIN
the area, or within a reasonable proximity to the area but in the same county IF FEWER
THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , have incomes that are less
than 80% of the median family income in the political subdivision that contains the area;
or
(iv) the population in EACH CENSUS TRACT WI THIN the area, or
within a reasonable proximity to the area but in the same county IF FEWER THAN 1,500
INDIVIDUALS RESIDE I N THE CENSUS TRACT , decreased by 10% between the most recent
two censuses, and the political subdivision can demonstrate to the Secretary’s satisfaction
that:
1. chronic abandonment or demolition of property is
occurring in the area; or
2. substantial property tax arrearages exist in the area.
(4) The Secretary:
(I) SHALL ADOP T REGULATIONS GOVERN ING THE EVALUATION
AND PRIORITIZATION O F APPLICATIONS FOR T HE DESIGNATION OF NE W
ENTERPRISE ZONES UND ER THIS SECTION AND THE EXPANSION OF EXI STING
ENTERPRISE ZONES UND ER § 5–705 OF THIS SUBTITLE; AND Ch. 732 2022 LAWS OF MARYLAND
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(II) may [establish by regulation any other requirements] ADOPT
REGULATIONS necessary and appropriate to carry out this subtitle.
(b) (1) Within 60 days after a submission date, the Secretary may designate
one or more enterprise zones from among the areas described in the applications timely
submitted.
(2) The designation of an area as an enterprise zone is effective for 10
years.
(3) The Secretary may not designate more than six enterprise zones in a
calendar year.
(4) IF THE SECRETARY REASONABLY ANTICIPATES THAT THE
AGGREGATE AMOUNT OF PROPERTY T AX CREDITS CLAIMED U NDER § 9–103 OF THE
TAX – PROPERTY ARTICLE FOR THE IMMED IATELY PRECEDING FIS CAL YEAR MAY
EXCEED $60,000,000, THE SECRETARY MAY NOT DES IGNATE A NEW ENTERPR ISE
ZONE DURING THE CURR ENT FISCAL YEAR .
[(4)] (5) A county may not receive more than two enterprise zones in a
calendar year.
5–705.
(a) (1) A political subdivision may apply to the Secretary to expand an existing
enterprise zone in the same manner as the political subdivision would apply to designate a
new enterprise zone.
(2) [The] EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION,
THE Secretary may grant an expansion of an enterprise zone into an area that meets the
requirements of § 5–704 of this subtitle.
(3) For purposes of § 5–704(b) of this subtitle, an expansion of an enterprise
zone that does not exceed [50%] 25% of the existing geographic area of the enterprise zone
does not count towards the limit on the number of enterprise zones that:
(i) the Secretary may designate in a calendar year; or
(ii) a county may receive in a calendar year.
(b) (1) The Secretary may grant one extraordinary expansion of an enterprise
zone in the State each calendar year for an area that:
(i) meets the requirements of § 5–704 of this subtitle; and LAWRENCE J. HOGAN, JR., Governor Ch. 732
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(ii) in the determination of the Secretary, has suffered a significant
loss of economic base OR MERITS INCLUSION IN AN ENTERPRISE ZON E FOR A
COMPELLING ECONOMIC REASON.
(2) For purposes of § 5–704(b) of this subtitle, an extraordinary expansion
of an enterprise zone IS NOT SUBJECT TO TH E LIMITATION UNDER S UBSECTION (C) OF
THIS SECTION AND does not count towards the limit on the number of enterprise zones
that:
(i) the Secretary may designate in a calendar year; or
(ii) a county may receive in a calendar year.
(C) IF THE SECRETARY REASONABLY ANTICIPATES THAT THE AGGREGATE
AMOUNT OF PROPERTY T AX CREDITS CLAIMED U NDER § 9–103 OF THE TAX –
PROPERTY ARTICLE FOR THE IMMED IATELY PRECEDING FIS CAL YEAR MAY EXCEED
$60,000,000, THE SECRETARY MAY NOT GRA NT AN EXPANSION OF A N EXISTING
ENTERPRISE ZONE DURI NG THE CURRENT FISCA L YEAR.
5–706.
(a) A political subdivision may request the Secretary to designate all or part of an
enterprise zone as a focus area for the lesser of:
(1) 5 years; or
(2) the remainder of the 10–year term of the applicable enterprise zone.
(b) The request may be made on or before a submission date when the political
subdivision applies for the designation of a new enterprise zone or after the Secretary has
designated an enterprise zone.
(c) The Secretary may grant the request if the area is located in an enterprise
zone and meets at least three of the following criteria:
(1) the average unemployment rate in EACH CENSUS TRACT WI THIN the
area, or within a reasonable proximity to the area but in the same county IF FEWER THAN
1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , for the most recent 18–month
period for which data are available is at least 150% of the greater of the average rate of
unemployment in either the State or the United States during that same period;
(2) the population in EACH CENSUS TRACT WI THIN the area, or within a
reasonable proximity to the area but in the same county IF FEWER THAN 1,500 Ch. 732 2022 LAWS OF MARYLAND
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INDIVIDUALS RESIDE I N THE CENSUS TRACT , has an incidence of poverty that is at least
150% of the national average;
(3) the crime rate in EACH CENSUS TRACT WI THIN the area, or within a
reasonable proximity to the area but in the same county IF FEWER THAN 1,500
INDIVIDUALS RESIDE IN THE CENSUS TRACT , is at least 150% of the crime rate in the
political subdivision where the area is located;
(4) the percentage of substandard housing in EACH CENSUS TRACT
WITHIN the area, or within a reasonable proximity to the area but in the same county IF
FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , is at least 200% of
the percentage of housing units in the State that are substandard, according to data from
the United States Bureau of the Census or other State or federal government data the
Secretary considers appropriate; or
(5) at least 20% of the square footage of commercial property in EACH
CENSUS TRACT WITHIN the area, or within a reasonable proximity to the area but within
the same county IF FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT ,
is vacant, according to data from the United States Bureau of the Census or other State or
federal government data the Secretary considers appropriate.
5–707.
(a) To the extent provided for in this section, a business entity is entitled to:
(1) the special property tax credit in § 9–103 of the Tax – Property Article;
(2) the income tax credits in § 10–702 of the Tax – General Article; and
(3) consideration for financial assistance from programs in Subtitle 1 of
this title.
(d) (1) Except as provided in § 10–702 of the Tax – General Article and §
9–103 of the Tax – Property Article, the incentives and initiatives set forth in this section
are available for 10 years after the date that an area is designated an enterprise zone.
(2) (I) A law enacted after the enactment of this section that eliminates
or reduces the benefits available to a business entity under this section does not apply to a
business entity that was in an enterprise zone before the effective date of the law.
(II) A BUSINESS ENTITY THAT LOCATES IN AN ENTERP RISE
ZONE BEFORE THE TERM INATION DATE OF THIS SUBTITLE PROVIDED UN DER §
5–710 OF THIS SUBTITLE REM AINS ELIGIBLE FOR TH E BENEFITS AVAILABLE TO A
BUSINESS ENTITY UNDE R THIS SECTION , PROVIDED THAT THE BU SINESS ENTITY LAWRENCE J. HOGAN, JR., Governor Ch. 732
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MEETS THE REQUIREMEN TS AND CONDITIONS OF THE CODE SECTION APPLICAB LE
TO THE BENEFIT .
5–709.
(a) The Department [and the Comptroller jointly] shall assess each year the
effectiveness of the tax credits provided to business entities in enterprise zones and focus
areas in enterprise zones, including:
(1) the number and amounts of credits granted each year; and
(2) the success of the tax credits in attracting and retaining business
entities in enterprise zones and focus areas.
(B) (1) ON OR BEFORE SEPTEMBER 15 EACH YEAR , THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION SHALL SUBMIT TO THE
DEPARTMENT A REPORT T HAT INCLUDES THE FOL LOWING INFO RMATION FOR THE
IMMEDIATELY PRECEDIN G TAXABLE YEAR :
(I) THE NUMBER OF PROPER TIES CLAIMING A PROP ERTY TAX
CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE CALCULATED IN
ACCORDANCE WITH § 9–103(D)(1) OF THE TAX – PROPERTY ARTICLE;
(II) THE NUMBER OF PROPERTIES CLAIMI NG A PROPERTY TAX
CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE CALCULATED IN
ACCORDANCE WITH § 9–103(D)(4) OF THE TAX – PROPERTY ARTICLE;
(III) THE NUMBER OF PROPER TIES NEWLY CERTIFIED AS
QUALIFIED PROPERTIES BY THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION AS ELIGIBLE FOR THE PRO PERTY TAX CREDIT UND ER § 9–103 OF THE TAX
– PROPERTY ARTICLE; AND
(IV) FOR EACH TAXPAYER CL AIMING OR RECEIVING A PROPERTY
TAX CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE :
1. THE NAME OF THE TAXPAYER ;
2. THE LOCATION OF THE QUALIFIED PROPERTY F OR
WHICH THE CREDIT WAS CLAIMED; AND
3. THE AMOUNT OF TAX SA VINGS RECEIVED BY EA CH
QUALIFIED PROPERTY .
Ch. 732 2022 LAWS OF MARYLAND
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(2) ON OR BEFORE SEPTEMBER 15 EACH YEAR, THE COMPTROLLER
SHALL SUBMIT TO THE DEPARTMENT A REPORT T HAT INCLUDES THE FOL LOWING
INFORMATION FOR THE IMMEDIATELY PRECEDIN G TAXABLE YEAR :
(I) THE NAME AND ADDRESS OF EACH BUSINESS ENT ITY THAT
CLAIMED AN INCOME TA X CREDIT UNDER § 10–702 OF THE TAX – GENERAL
ARTICLE;
(II) THE BUSINES S ACTIVITY CODE OR NORTH AMERICAN
INDUSTRY CLASSIFICATION SYSTEM (NAICS) CODE OF THE BUSINESS ENTITY;
(III) THE NUMBER OF QUALIF IED EMPLOYEES AND FO CUS AREA
EMPLOYEES EMPLOYED B Y THE BUSINESS ENTIT Y;
(IV) THE NUMBER OF ECONOM ICALLY DISADVANTAGED
INDIVIDUALS EMPLOYED B Y THE BUSINESS ENTIT Y AND THE NUMBER OF YEARS FOR
WHICH THOSE ECONOMIC ALLY DISADVANTAGED I NDIVIDUALS HAVE BEEN
EMPLOYED BY THE BUSI NESS ENTITY; AND
(V) THE TOTAL AMOUNT OF THE INCOME TAX CREDI T CLAIMED
BY THE BUSINESS ENTI TY.
(C) (1) (I) ON OR BEFORE SEPTEMBER 15 EACH YEAR, EACH COUNTY
WITHIN WHICH AN ENTE RPRISE ZONE IS LOCAT ED SHALL SUBMIT TO T HE
DEPARTMENT A DETAILED REPORT ON EACH ENTER PRISE ZONE IN THE CO UNTY TO
ASSIST THE DEPARTMENT IN THE ASS ESSMENT REQUIRED UND ER SUBSECTION (A)
OF THIS SECTION.
(II) THE COUNTY SHALL INCL UDE IN THE REPORT RE QUIRED
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH TH E FOLLOWING INFORMAT ION
FOR THE IMMEDIATELY PRECEDING FISCAL YEA R:
1. THE NUMBER OF PROPER TIES NEWLY CERTIFIED AS
QUALIFIED PROPERTIES;
1. 2. NOTABLE EXAMPLES OF REDEVELOPMENT OR NEW
BUSINESSES RELOCATIN G OR EXPANDING IN TH E ENTERPRISE ZONE DU E TO THE
TAX CREDITS PROVIDED UNDER THIS SUBTITLE ; AND
2. 3. A DESCRIPTION OF FUT URE ECONOMIC
DEVELOPMENT PROJECTS THAT MIGHT CLAIM A TAX CREDIT P ROVIDED UNDER THIS
SUBTITLE, INCLUDING WITH RESPE CT TO EACH PROJECT :
LAWRENCE J. HOGAN, JR., Governor Ch. 732
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A. WHETHER THE PROJECT IS LOCATED WITHIN A FOCUS
AREA;
B. WHETHER THE PROJECT MAY QUALIFY FOR A CR EDIT
UNDER THIS SUBTITLE AGAINST THE TAX IMPO SED ON REAL PR OPERTY, PERSONAL
PROPERTY, OR INCOME; AND
C. ANTICIPATED CAPITAL OR PERSONAL PROPERTY
EXPENDITURES FOR THE PROJECT.
(2) (I) IF A COUNTY FAILS TO PROVIDE THE REPORT R EQUIRED
UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE DEPARTMENT SHALL NOTI FY
THE COUNTY THAT THE REPO RT IS DUE.
(II) IF, AFTER THE DEPARTMENT HAS PROVID ED A COUNTY THE
NOTICE DESCRIBED UND ER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE COUNTY
FAILS TO PROMPTLY PR OVIDE THE OVERDUE RE PORT, THE SECRETARY MAY NOT
DESIGNATE A NEW ENTE RPRISE ZONE IN THE COUNTY O R GRANT THE EXPANSIO N OF
AN EXISTING ENTERPRI SE ZONE IN THE COUNT Y UNTIL THE REPORT I S RECEIVED
BY THE DEPARTMENT .
(D) THE DEPARTMENT SHALL DEVE LOP FORMAL METRICS A ND A
FRAMEWORK FOR ANALYZ ING:
(1) THE COST–EFFECTIVENESS OF EAC H ENTERPRISE ZONE ; AND
(2) THE EFFECTIVENESS OF EACH ENTERPRISE ZONE IN ATTRACTING
BUSINESSES AND INCRE ASING EMPLOYMENT .
[(b)] (E) On or before December 15 [of] each year, the Department [and the
Comptroller] shall submit to the Governor and, in accordance with § 2–1257 of the State
Government Article, the General Assembly a report outlining the findings of the
Department [and the Comptroller] and any other information of value in determining the
effectiveness of the tax credits provided under § 5–707(b) of this subtitle.
5–710.
THIS SUBTITLE AND , EXCEPT AS PROVIDED I N § 5–707(D)(2) OF THIS
SUBTITLE, ELIGIBILITY FOR THE TAX CREDITS PROVIDED UNDER § 5–707(A) OF THIS
SUBTITLE SHALL TERMI NATE ON JANUARY 1, 2030.
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read
as follows:
Ch. 732 2022 LAWS OF MARYLAND
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Article – Tax – General
10–702.
(a) (1) In this section the following words have the meanings indicated.
(2) (i) “Business entity” means:
1. a person conducting or operating a trade or business; or
2. an organization that is exempt from taxation under §
501(c)(3) or (4) of the Internal Revenue Code.
(ii) “Business entity” does not include a person owning, operating,
developing, constructing, or rehabilitating property intended for use primarily as single or
multifamily residential property located within the enterprise zone.
(3) “Economically disadvantaged individual” means an individual who is
certified by provisions that the Maryland Department of Labor adopts as an individual who,
before becoming employed by a business entity in an enterprise zone:
(i) was both unemployed for at least 30 consecutive days and
qualified to participate in training activities for the economically disadvantaged under the
federal Workforce Innovation and Opportunity Act or its successor; or
(ii) in the absence of an applicable federal act, met the criteria for an
economically disadvantaged individual that the Secretary of Labor sets.
(4) (i) “Enterprise zone” has the meaning stated in § 5–701 of the
Economic Development Article.
(ii) “Enterprise zone” includes a Regional Institution Strategic
Enterprise zone established under Title 5, Subtitle 14 of the Economic Development Article.
(5) “Focus area” has the meaning stated in § 5–701 of the Economic
Development Article.
(6) “Focus area employee” means an individual who:
(i) is a new employee or an employee rehired after being laid off for
more than 1 year by a business entity;
(ii) is employed by a business entity at least 35 hours each week for
at least 12 months before or during the taxable year for which the entity claims a credit;
LAWRENCE J. HOGAN, JR., Governor Ch. 732
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(iii) spends at least [50 percent] 50% of the hours under item (ii) of
this paragraph either in the focus area or on activities of the business entity resulting
directly from its location in the focus area;
(iv) is hired by the business entity after the later of:
1. the date on which the focus area is designated; or
2. The date on which the business entity located in the focus
area; and
(v) earns at least [150 percent] 120% of the [federal] STATE
minimum wage.
(7) “Qualified employee” means an individual who:
(i) is [a new employee] HIRED TO FILL A NEWL Y CREATED
POSITION or [an employee rehired after being laid off for more than 1 year by a business
entity], IF THE INDIVIDUAL IS AN ECONOMICALLY DISA DVANTAGED INDIVIDUAL , IS
HIRED TO FILL A POSI TION PREVIOUSLY HELD BY ANOTHER ECONOMICALLY
DISADVANTAGED INDIVI DUAL;
(ii) is employed by a business entity at least 35 hours each week for
at least 6 months before or during the taxable year for which the entity claims a credit;
(iii) spends at least 50% of the hours under item (ii) of this paragraph,
either in the enterprise zone or on activities of the business entity resulting directly from
its location in the enterprise zone;
(iv) earns at least [150%] 120% of the [federal] STATE minimum
wage; and
(v) is hired by the business entity after the later of:
1. the date on which the enterprise zone is designated; or
2. the date on which the business entity locates in the
enterprise zone.
(b) (1) [Any] SUBJECT TO THE LIMITA TIONS OF THIS SECTIO N, ANY
business entity that is located in an enterprise zone and satisfies the requirements of §
5–707 of the Economic Development Article may claim a credit only against the State
income tax for the wages specified in subsections (c) and (d) of this section that are paid in
the taxable year for which the entity claims the credit.
Ch. 732 2022 LAWS OF MARYLAND
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(2) [A] SUBJECT TO THE LIMITA TIONS OF THIS SECTIO N, A business
entity that is located in a focus area and satisfies the requirements of § 5–707 of the
Economic Development Article may claim a credit only against the State income tax for the
wages specified in subsection (e) of this section that are paid to a focus area employee in
the taxable year for which the entity claims the credit.
(3) An organization that is exempt from taxation under § 501(c)(3) or (4) of
the Internal Revenue Code may apply the credit under this section as a credit against
income tax due on unrelated business taxable income as provided under §§ 10–304 and
10–812 of this title.
(c) If a business entity does not claim an enhanced tax credit under subsection (e)
of this section for a focus area employee, for the taxable year in which a business entity
satisfies the requirements of § 5–707 or § 5–1406 of the Economic Development Article, a
credit is allowed that equals:
(1) up to $3,000 of the wages paid to each qualified employee who:
(i) is an economically disadvantaged individual; and
(ii) is not hired to replace an individual whom the business entity
employed in that or any of the 3 preceding taxable years; and
(2) up to $1,000 of the wages paid to each qualified employee who:
(i) is not an economically disadvantaged individual; and
(ii) is not hired to replace an individual whom the business entity
employed in that or any of the 3 preceding taxable years.
(d) (1) If a business entity does not claim an enhanced tax credit under
subsection (e) of this section for a focus area employee, for each taxable year after the
taxable year described in subsection (c) of this section, while the area is designated an
enterprise zone, a credit is allowed that equals:
(i) up to $3,000 of the wages paid to each qualified employee who:
1. is an economically disadvantaged individual;
2. became a qualified employee during the taxable year to
which the credit applies; and
3. is not hired to replace an individual whom the business
entity employed in that or any of the 3 preceding taxable years;
LAWRENCE J. HOGAN, JR., Governor Ch. 732
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(ii) up to $2,000 of the wages paid to each qualified employee who is
an economically disadvantaged individual, if the business entity received a credit under
subsection (c)(1) of this section for the qualified employee in the immediately preceding
taxable year; and
(iii) up to $1,000 of the wages paid to each qualified employee who is
not hired to replace an individual whom the business entity employed in that or any of the
3 preceding taxable years if the qualified employee:
1. is an economically disadvantaged individual for whom the
business entity received a credit under subsection (c)(1) of this section or item (i) of this
paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding
taxable years; or
2. is not an economically disadvantaged individual but
became a qualified employee during the taxable year to which the credit applies.
(2) A business entity that hires a qualified employee to replace another
qualified employee for whom the business entity received a credit under subsection (c)(1) of
this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable
year may treat the new qualified employee as the replacement for the other qualified
employee to determine any credit that may be available to the business entity under
paragraph (1)(ii) or (iii) of this subsection.
(e) (1) For the taxable year in which a business entity satisfies the
requirements of §§ 5–706 and 5–707 or § 5–1406 of the Economic Development Article, a
credit is allowed that equals:
(i) up to $4,500 of the wages paid to each focus area employee who:
1. is an economically disadvantaged individual; and
2. is not hired to replace an individual whom the business
entity employed in that year or any of the 3 preceding taxable years; and
(ii) up to $1,500 of the wages paid to each focus area employee who:
1. is not an economically disadvantaged individual; and
2. is not hired to replace an individual whom the business
entity employed in that year or any of the 3 preceding taxable years.
(2) For each taxable year after the taxable year described in paragraph (1)
of this subsection, while the area is designated a focus area, a credit is allowed that equals:
(i) up to $4,500 of the wages paid to each focus area employee who: Ch. 732 2022 LAWS OF MARYLAND
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1. is an economically disadvantaged individual;
2. became a focus area employee during the taxable year to
which the credit applies; and
3. is not hired to replace an individual whom the business
entity employed in that year or any of the 3 preceding taxable years;
(ii) up to $3,000 of the wages paid to each focus area employee who
is an economically disadvantaged individual, if the business entity received a credit under
paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding
taxable year; and
(iii) up to $1,500 of the wages paid to each focus area employee who
is not hired to replace an individual whom the business entity employed in that year or any
of the 3 preceding taxable years if the focus area employee:
1. is an economically disadvantaged individual for whom the
business entity received a credit under item (ii) of this paragraph in the 2 immediately
preceding taxable years and under:
A. paragraph (1)(i) of this subsection; or
B. item (i) of this paragraph; or
2. is not an economically disadvantaged individual but
became a focus area employee during the taxable year to which the credit applies.
(3) A business entity that hires a focus area employee to replace another
focus area employee for whom the business entity received a credit under paragraph (1)(i)
of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding
taxable year may treat the focus area employee as the replacement for the other focus area
employee to determine any credit that may be available to the business entity under
paragraph (2)(ii) or (iii) of this subsection.
(F) (1) THE CREDIT ALLOWED UN DER THIS SECTION SHA LL BE CLAIMED
ON A FIRST–COME, FIRST–SERVED BASIS.
(2) FOR ANY TAXABLE YEAR :
(I) THE CREDIT ALLOWED U NDER THIS SECTION MAY NOT
EXCEED $250,000; AND
LAWRENCE J. HOGAN, JR., Governor Ch. 732
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(II) THE TOTAL AMOUNT OF CREDITS CLAIMED BY B USINESS
ENTITIES MAY NOT EXC EED $2,000,000.
[(f)] (G) If the credit allowed under this section in any taxable year exceeds the
State income tax for that taxable year, a business entity may apply the excess as a credit
against the State income tax for succeeding taxable years until the earlier of:
(1) the full amount of the excess is used; or
(2) the expiration of the 5th taxable year from the date on which the
business entity hired the qualified employee to whom the credit first applies.
[(g)] (H) If a credit is claimed under this section, the claimant must make the
addition required in § 10–205, § 10–206, or § 10–306 of this title.
SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read
as follows:
Article – Tax – Property
9–103.
(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] SUBJECT TO THE LIMITA TION UNDER PARAGRAPH (5) 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.
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(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.
(5) FOR ANY TAXABLE YEAR, THE AMOUNT OF A PROP ERTY TAX
CREDIT GRANTED UNDER THIS SECTION TO A QU ALIFIED PROPERTY MAY NOT
EXCEED $500,000.
SECTION 4. 3. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall
be applicable to all taxable years beginning after December 31, 2021.
SECTION 5. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall be
applicable to all taxable years beginning after June 30, 2022.
SECTION 6. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect
June 1, 2022.
Enacted under Article II, § 17(c) of the Maryland Constitution, May 29, 2022.