EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0969*
HOUSE BILL 969
Q1 5lr3270
CF SB 774
By: Delegate A. Johnson Delegates A. Johnson, Griffith, and Wells
Introduced and read first time: January 31, 2025
Assigned to: Ways and Means
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 4, 2025
CHAPTER ______
AN ACT concerning 1
Property Tax – Valuation of Operating Property of Rural Payment in Lieu of 2
Taxes Agreements – Broadband Service Providers 3
FOR the purpose of requiring the State Department of Assessments and Taxation, subject 4
to certain limitations, to use a certain method when determining the value of the 5
operating property of a provider of rural broadband service; and generally relating 6
to the valuation of authorizing the governing body of a county to enter into a payment 7
in lieu of taxes agreement with a provider of broadband service located in the county 8
for property located in the county and owned by the provider; and generally relating 9
to payment in lieu of taxes agreements for the property of rural broadband service 10
providers. 11
BY repealing and reenacting, with amendments, 12
Article – Tax – Property 13
Section 8–109 14
Annotated Code of Maryland 15
(2019 Replacement Volume and 2024 Supplement) 16
BY adding to 17
Article – Tax – Property 18
Section 7–522 19
Annotated Code of Maryland 20
(2019 Replacement Volume and 2024 Supplement) 21
2 HOUSE BILL 969
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Tax – Property 3
8–109. 4
(a) [The] EXCEPT AS PROVIDED IN SUBSECTION (F) OF THIS SECTION, THE 5
Department shall annually value the operating unit of a public utility on the basis of the 6
value of the operating property of the public utility, by considering: 7
(1) the earning capacity of the operating unit; and 8
(2) all other factors relevant to a determination of value of the operating 9
unit. 10
(b) The Department shall allocate to this State the value of that part of the 11
operating unit that is reasonably attributable to the part located in this State. 12
(c) (1) From the value allocated to this State under subsection (b) of this 13
section, the Department shall deduct: 14
(i) the fair average value of fuel that represents the percentage 15
reduction or exemption authorized by §§ 7–108, 7–222, and 7–226 of this article; and 16
(ii) the assessment of operating property, if any, that is exempt by 17
law from property tax. 18
(2) (i) The value remaining after making the deductions shall be 19
divided into an operating real property value and an operating personal property value, as 20
determined by the Department. 21
(ii) The value of operating real property is the assessment of 22
operating real property of a public utility. 23
(iii) The value of operating personal property is the assessment of 24
operating personal property of a public utility. 25
(3) Operating land of a public utility is valued and assessed by the 26
Department as part of the operating unit and is not valued and assessed by the supervisor. 27
(4) The provisions of this subsection are not intended to alter the law as 28
codified in former Article 81 of the Code that was in effect as of January 31, 1986. 29
(5) Returns, notices, and appeals of operating property assessments shall 30
be administered pursuant to the sections of this article governing personal property 31
assessments. 32 HOUSE BILL 969 3
(d) For operating property of a public utility, the Department shall apportion the 1
assessment of that operating property among the counties and municipal corporations 2
where the operating property is located. 3
(e) (1) In determining whether to classify a company as a public utility, the 4
Department shall consider and evaluate whether the company: 5
(i) is subject to the authority of a regulatory body of the State or the 6
federal government, such as the Maryland Public Service Commission, the Federal 7
Communications Commission, or the Federal Energy Regulatory Commission; 8
(ii) uses a significant portion of the real and personal property used 9
in its business operations as an integrated whole or unit; 10
(iii) provides a basic service to the public; and 11
(iv) owns or uses assets that are most appropriately appraised using 12
the unit valuation method. 13
(2) Notwithstanding a company’s failure to meet all of the criteria under 14
paragraph (1) of this subsection, the Department may classify the company as a public 15
utility if the Department determines that the company predominantly meets the criteria. 16
(F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IN 17
DETERMINING THE VALU E OF OPERATING PROPE RTY OF A PROVIDER OF RURAL 18
BROADBAND SERVICE , THE DEPARTMENT : 19
(I) WHEN USING AN INCOME APPROACH, SHALL CONSIDER 20
ONLY ACTUAL OPERATIN G INCOME; AND 21
(II) WHEN USING A REPLACE MENT COST APPROACH , SHALL 22
OFFSET THE VALUATION OF PROPERTY TO THE E XTENT OF ANY CONTRIB UTIONS, 23
TAX CREDITS, OR OTHER SUBSIDIES A ND BENEFITS PROVIDED BY A GOVERNMENTAL 24
UNIT OR PROGRAM. 25
(2) THE DEPARTMENT MAY USE TH E REPLACEMENT COST A PPROACH 26
UNDER PARAGRAPH (1)(II) OF THIS SUBSECTION O NLY IF THE VALUE DET ERMINED 27
IS LESS THAN THE VAL UE DETERMINED USING THE INCOME APPROACH UNDER 28
PARAGRAPH (1)(I) OF THIS SUBSECTION . 29
[(f)] (G) The Department may adopt regulations to carry out the provisions of 30
this section. 31
7–522. 32
4 HOUSE BILL 969
(A) THE GOVERNING BODY OF A COUNTY MAY ENTER I NTO AN AGREEMENT 1
WITH A BROADBAND SER VICES PROVIDER LOCAT ED IN THE COUNTY FOR A 2
NEGOTIATED PAYMENT B Y THE PROVIDER IN LI EU OF TAXES ON PROPER TY 3
LOCATED IN THE COUNT Y AND OWNED BY THE P ROVIDER. 4
(B) AN AGREEMENT FOR A NE GOTIATED PAYMENT IN LIEU OF TAXES UNDER 5
THIS SECTION SHALL P ROVIDE THAT , FOR THE TERM SPECIFI ED IN THE 6
AGREEMENT : 7
(1) THE PROVIDER SHALL P AY TO THE COUNTY A SPECIFIED AMOUNT 8
EACH YEAR IN LIEU OF THE PAYMENT OF COUNT Y REAL AND PERSONAL PROPERTY 9
TAX; AND 10
(2) ALL OR A SPECIFIED P ART OF THE PROVIDER ’S REAL AND 11
PERSONAL PROPERTY LO CATED IN THE COUNTY SHALL BE EXEMPT FROM COUNTY 12
PROPERTY TAX FOR THE TERM OF THE AGREEMENT . 13
(C) AS SPECIFIED IN AN AG REEMENT FOR A NEGOTI ATED PAYMENT IN LIEU 14
OF TAXES UNDER THIS SECTION, FOR THE TERM SPECIFI ED IN THE AGREEMENT , THE 15
PROVIDER’S REAL AND PERSONAL PROPERTY LOCATED IN THE COUNTY IS EXEMPT 16
FROM COUNTY PROPERTY TAX. 17
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 18
1, 2025, and shall be applicable to all taxable years beginning after June 30, 2025. 19
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.