MD
Maryland House Bill HB969

Maryland 2025 Regular Session

Maryland House Bill HB969 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
44 [Brackets] indicate matter deleted from existing law.
5- Underlining indicates amendments to bill.
6- Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7-amendment.
85 *hb0969*
96
107 HOUSE BILL 969
118 Q1 5lr3270
129 CF SB 774
13-By: Delegate A. Johnson Delegates A. Johnson, Griffith, and Wells
10+By: Delegate A. Johnson
1411 Introduced and read first time: January 31, 2025
1512 Assigned to: Ways and Means
16-Committee Report: Favorable with amendments
17-House action: Adopted
18-Read second time: March 4, 2025
1913
20-CHAPTER ______
14+A BILL ENTITLED
2115
2216 AN ACT concerning 1
2317
24-Property Tax – Valuation of Operating Property of Rural Payment in Lieu of 2
25-Taxes Agreements – Broadband Service Providers 3
18+Property Tax – Valuation of Operating Property of Rural Broadband Service 2
19+Providers 3
2620
2721 FOR the purpose of requiring the State Department of Assessments and Taxation, subject 4
2822 to certain limitations, to use a certain method when determining the value of the 5
2923 operating property of a provider of rural broadband service; and generally relating 6
30-to the valuation of authorizing the governing body of a county to enter into a payment 7
31-in lieu of taxes agreement with a provider of broadband service located in the county 8
32-for property located in the county and owned by the provider; and generally relating 9
33-to payment in lieu of taxes agreements for the property of rural broadband service 10
34-providers. 11
24+to the valuation of the property of rural broadband service providers. 7
3525
36-BY repealing and reenacting, with amendments, 12
37- Article – Tax – Property 13
38-Section 8–109 14
39- Annotated Code of Maryland 15
40- (2019 Replacement Volume and 2024 Supplement) 16
26+BY repealing and reenacting, with amendments, 8
27+ Article – Tax – Property 9
28+Section 8–109 10
29+ Annotated Code of Maryland 11
30+ (2019 Replacement Volume and 2024 Supplement) 12
4131
42-BY adding to 17
43- Article – Tax – Property 18
44- Section 7–522 19
45- Annotated Code of Maryland 20
46- (2019 Replacement Volume and 2024 Supplement) 21
32+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
33+That the Laws of Maryland read as follows: 14
34+
35+Article – Tax – Property 15
36+
37+8–109. 16
38+
39+ (a) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 17
40+Department shall annually value the operating unit of a public utility on the basis of the 18
41+value of the operating property of the public utility, by considering: 19
42+
43+ (1) the earning capacity of the operating unit; and 20
44+
45+ (2) all other factors relevant to a determination of value of the operating 21
46+unit. 22
4747 2 HOUSE BILL 969
4848
4949
50- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
51-That the Laws of Maryland read as follows: 2
50+ (b) The Department shall allocate to this State the value of that part of the 1
51+operating unit that is reasonably attributable to the part located in this State. 2
5252
53-Article – Tax – Property 3
53+ (c) (1) From the value allocated to this State under subsection (b) of this 3
54+section, the Department shall deduct: 4
5455
55-8–109. 4
56+ (i) the fair average value of fuel that represents the percentage 5
57+reduction or exemption authorized by §§ 7–108, 7–222, and 7–226 of this article; and 6
5658
57- (a) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 5
58-Department shall annually value the operating unit of a public utility on the basis of the 6
59-value of the operating property of the public utility, by considering: 7
59+ (ii) the assessment of operating property, if any, that is exempt by 7
60+law from property tax. 8
6061
61- (1) the earning capacity of the operating unit; and 8
62+ (2) (i) The value remaining after making the deductions shall be 9
63+divided into an operating real property value and an operating personal property value, as 10
64+determined by the Department. 11
6265
63- (2) all other factors relevant to a determination of value of the operating 9
64-unit. 10
66+ (ii) The value of operating real property is the assessment of 12
67+operating real property of a public utility. 13
6568
66- (b) The Department shall allocate to this State the value of that part of the 11
67-operating unit that is reasonably attributable to the part located in this State. 12
69+ (iii) The value of operating personal property is the assessment of 14
70+operating personal property of a public utility. 15
6871
69- (c) (1) From the value allocated to this State under subsection (b) of this 13
70-section, the Department shall deduct: 14
72+ (3) Operating land of a public utility is valued and assessed by the 16
73+Department as part of the operating unit and is not valued and assessed by the supervisor. 17
7174
72- (i) the fair average value of fuel that represents the percentage 15
73-reduction or exemption authorized by §§ 7–108, 7–222, and 7–226 of this article; and 16
75+ (4) The provisions of this subsection are not intended to alter the law as 18
76+codified in former Article 81 of the Code that was in effect as of January 31, 1986. 19
7477
75- (ii) the assessment of operating property, if any, that is exempt by 17
76-law from property tax. 18
78+ (5) Returns, notices, and appeals of operating property assessments shall 20
79+be administered pursuant to the sections of this article governing personal property 21
80+assessments. 22
7781
78- (2) (i) The value remaining after making the deductions shall be 19
79-divided into an operating real property value and an operating personal property value, as 20
80-determined by the Department. 21
82+ (d) For operating property of a public utility, the Department shall apportion the 23
83+assessment of that operating property among the counties and municipal corporations 24
84+where the operating property is located. 25
8185
82- (ii) The value of operating real property is the assessment of 22
83-operating real property of a public utility. 23
86+ (e) (1) In determining whether to classify a company as a public utility, the 26
87+Department shall consider and evaluate whether the company: 27
8488
85- (iii) The value of operating personal property is the assessment of 24
86-operating personal property of a public utility. 25
89+ (i) is subject to the authority of a regulatory body of the State or the 28
90+federal government, such as the Maryland Public Service Commi ssion, the Federal 29
91+Communications Commission, or the Federal Energy Regulatory Commission; 30
8792
88- (3) Operating land of a public utility is valued and assessed by the 26
89-Department as part of the operating unit and is not valued and assessed by the supervisor. 27
93+ (ii) uses a significant portion of the real and personal property used 31
94+in its business operations as an integrated whole or unit; 32
9095
91- (4) The provisions of this subsection are not intended to alter the law as 28
92-codified in former Article 81 of the Code that was in effect as of January 31, 1986. 29
93-
94- (5) Returns, notices, and appeals of operating property assessments shall 30
95-be administered pursuant to the sections of this article governing personal property 31
96-assessments. 32 HOUSE BILL 969 3
96+ (iii) provides a basic service to the public; and 33 HOUSE BILL 969 3
9797
9898
9999
100- (d) For operating property of a public utility, the Department shall apportion the 1
101-assessment of that operating property among the counties and municipal corporations 2
102-where the operating property is located. 3
100+ (iv) owns or uses assets that are most appropriately appraised using 1
101+the unit valuation method. 2
103102
104- (e) (1) In determining whether to classify a company as a public utility, the 4
105-Department shall consider and evaluate whether the company: 5
103+ (2) Notwithstanding a company’s failure to meet all of the criteria under 3
104+paragraph (1) of this subsection, the Department may classify the company as a public 4
105+utility if the Department determines that the company predominantly meets the criteria. 5
106106
107- (i) is subject to the authority of a regulatory body of the State or the 6
108-federal government, such as the Maryland Public Service Commission, the Federal 7
109-Communications Commission, or the Federal Energy Regulatory Commission; 8
107+ (F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IN 6
108+DETERMINING THE VALU E OF OPERATING PROPE RTY OF A PROVIDER OF RURAL 7
109+BROADBAND SERVICE, THE DEPARTMENT : 8
110110
111- (ii) uses a significant portion of the real and personal property used 9
112-in its business operations as an integrated whole or unit; 10
111+ (I) WHEN USING AN INCOME APPROACH, SHALL CONSIDER 9
112+ONLY ACTUAL OPERATIN G INCOME; AND 10
113113
114- (iii) provides a basic service to the public; and 11
114+ (II) WHEN USING A REPLACE MENT COST APPROACH , SHALL 11
115+OFFSET THE VALUATION OF PROPERTY TO THE E XTENT OF ANY CONTRIB UTIONS, 12
116+TAX CREDITS, OR OTHER SUBSIDIES AND BENEFITS PROVIDED BY A GOVERNMENTAL 13
117+UNIT OR PROGRAM . 14
115118
116- (iv) owns or uses assets that are most appropriately appraised using 12
117-the unit valuation method. 13
119+ (2) THE DEPARTMENT MAY USE TH E REPLACEMENT COST A PPROACH 15
120+UNDER PARAGRAPH (1)(II) OF THIS SUBSECTION O NLY IF THE VALUE DET ERMINED 16
121+IS LESS THAN THE VAL UE DETERMINED USING THE INCOME APPROACH UNDER 17
122+PARAGRAPH (1)(I) OF THIS SUBSECTION . 18
118123
119- (2) Notwithstanding a company’s failure to meet all of the criteria under 14
120-paragraph (1) of this subsection, the Department may classify the company as a public 15
121-utility if the Department determines that the company predominantly meets the criteria. 16
124+ [(f)] (G) The Department may adopt regulations to carry out the provisions of 19
125+this section. 20
122126
123- (F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IN 17
124-DETERMINING THE VALU E OF OPERATING PROPE RTY OF A PROVIDER OF RURAL 18
125-BROADBAND SERVICE , THE DEPARTMENT : 19
127+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 21
128+1, 2025, and shall be applicable to all taxable years beginning after June 30, 2025. 22
126129
127- (I) WHEN USING AN INCOME APPROACH, SHALL CONSIDER 20
128-ONLY ACTUAL OPERATIN G INCOME; AND 21
129-
130- (II) WHEN USING A REPLACE MENT COST APPROACH , SHALL 22
131-OFFSET THE VALUATION OF PROPERTY TO THE E XTENT OF ANY CONTRIB UTIONS, 23
132-TAX CREDITS, OR OTHER SUBSIDIES A ND BENEFITS PROVIDED BY A GOVERNMENTAL 24
133-UNIT OR PROGRAM. 25
134-
135- (2) THE DEPARTMENT MAY USE TH E REPLACEMENT COST A PPROACH 26
136-UNDER PARAGRAPH (1)(II) OF THIS SUBSECTION O NLY IF THE VALUE DET ERMINED 27
137-IS LESS THAN THE VAL UE DETERMINED USING THE INCOME APPROACH UNDER 28
138-PARAGRAPH (1)(I) OF THIS SUBSECTION . 29
139-
140- [(f)] (G) The Department may adopt regulations to carry out the provisions of 30
141-this section. 31
142-
143-7–522. 32
144- 4 HOUSE BILL 969
145-
146-
147- (A) THE GOVERNING BODY OF A COUNTY MAY ENTER I NTO AN AGREEMENT 1
148-WITH A BROADBAND SER VICES PROVIDER LOCAT ED IN THE COUNTY FOR A 2
149-NEGOTIATED PAYMENT B Y THE PROVIDER IN LI EU OF TAXES ON PROPER TY 3
150-LOCATED IN THE COUNT Y AND OWNED BY THE P ROVIDER. 4
151-
152- (B) AN AGREEMENT FOR A NE GOTIATED PAYMENT IN LIEU OF TAXES UNDER 5
153-THIS SECTION SHALL P ROVIDE THAT , FOR THE TERM SPECIFI ED IN THE 6
154-AGREEMENT : 7
155-
156- (1) THE PROVIDER SHALL P AY TO THE COUNTY A SPECIFIED AMOUNT 8
157-EACH YEAR IN LIEU OF THE PAYMENT OF COUNT Y REAL AND PERSONAL PROPERTY 9
158-TAX; AND 10
159-
160- (2) ALL OR A SPECIFIED P ART OF THE PROVIDER ’S REAL AND 11
161-PERSONAL PROPERTY LO CATED IN THE COUNTY SHALL BE EXEMPT FROM COUNTY 12
162-PROPERTY TAX FOR THE TERM OF THE AGREEMENT . 13
163-
164- (C) AS SPECIFIED IN AN AG REEMENT FOR A NEGOTI ATED PAYMENT IN LIEU 14
165-OF TAXES UNDER THIS SECTION, FOR THE TERM SPECIFI ED IN THE AGREEMENT , THE 15
166-PROVIDER’S REAL AND PERSONAL PROPERTY LOCATED IN THE COUNTY IS EXEMPT 16
167-FROM COUNTY PROPERTY TAX. 17
168-
169- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 18
170-1, 2025, and shall be applicable to all taxable years beginning after June 30, 2025. 19
171-
172-
173-
174-
175-Approved:
176-________________________________________________________________________________
177- Governor.
178-________________________________________________________________________________
179- Speaker of the House of Delegates.
180-________________________________________________________________________________
181- President of the Senate.