Economic Development - Tax Increment Financing - Noncontiguous Areas
Summary
HB942 expands Maryland’s tax increment financing (TIF) law to allow development districts to include noncontiguous areas, not just contiguous ones. The bill defines a “development district” to include noncontiguous areas and adds a new category for “noncontiguous blighted areas.” It also makes clear that the subtitle generally does not apply in Baltimore City, except for the new provisions dealing with noncontiguous blighted areas.
The bill authorizes local governing bodies, by resolution, to designate a noncontiguous blighted area as a development district and to issue bonds for development projects in those districts. It also permits the Community Development Administration in the Department of Housing and Community Development to issue bonds for such projects. For noncontiguous blighted areas, the bill requires local governments to limit redevelopment of noncontiguous parcels within the district to affordable housing that is deed-restricted for households earning no more than 80% of area median income.
Impact
HB942 amends the Economic Development Article provisions governing tax increment financing, development districts, and bond issuance. It changes the statutory definition of development district, adds procedures for designating noncontiguous blighted areas, and creates a new affordable-housing restriction tied to redevelopment in those districts. The bill also expands financing options by allowing the Community Development Administration to issue bonds for qualifying noncontiguous blighted area projects, and it applies these provisions in Baltimore City despite the general exclusion of the subtitle there.
Sentiment
The bill appears to have broad support. It received a favorable committee report with amendments and then passed the House on third reading by a wide margin, 131-5. The voting history suggests the measure was generally viewed positively as a targeted economic development and redevelopment tool, especially for blighted areas and affordable housing.
Contention
The main policy issue is the scope of tax increment financing authority and how it should be used in noncontiguous blighted areas. Supporters likely view the bill as a way to unlock redevelopment in distressed areas that are not geographically compact, while the affordable-housing restriction indicates concern that the financing tool should produce public benefits. Potential points of contention include the expansion of local bonding authority, the use of state housing finance mechanisms, and the requirement that redevelopment in these districts be limited to deed-restricted affordable housing at or below 80% of area median income.