Property Tax - Payment in Lieu of Taxes Agreements - Broadband Service Providers
Summary
HB969 changes Maryland property tax law in two related ways for rural broadband providers. First, it directs the State Department of Assessments and Taxation, when valuing the operating property of a provider of rural broadband service, to use an income approach based only on actual operating income and, if a replacement-cost approach is used, to reduce the valuation by the amount of government contributions, tax credits, subsidies, or similar benefits. The department may use the replacement-cost approach only if it produces a lower value than the income approach.
Second, the bill authorizes a county governing body to enter into a payment-in-lieu-of-taxes (PILOT) agreement with a broadband services provider located in the county for property owned by the provider in the county. Under such an agreement, the provider pays a negotiated annual amount instead of county real and personal property taxes, and the agreement can exempt all or part of the provider’s property from county property tax for the term of the agreement. The act takes effect June 1, 2025, and applies to taxable years beginning after June 30, 2025.
Impact
The bill amends Tax-Property Article § 8-109 and adds new § 7-522 to Maryland law. It creates a special valuation rule for rural broadband service providers’ operating property and gives counties explicit authority to negotiate PILOT agreements with broadband providers, potentially reducing county property tax assessments and replacing them with contract-based payments. The changes are aimed at broadband infrastructure investment and may affect how rural broadband assets are assessed, taxed, and incentivized across counties.
Sentiment
The bill appears to have broad support. It passed the House 134-1 and the Senate 46-0, indicating strong bipartisan approval and little recorded opposition. The absence of committee transcript discussion suggests no major public controversy was captured in the available materials, and the voting history reflects a generally favorable view of the bill’s broadband-expansion goals.
Contention
The main policy issue is how to value broadband providers’ operating property for tax purposes and whether counties should be able to trade standard property taxation for negotiated PILOT agreements. Supporters likely view the bill as a way to encourage rural broadband deployment by recognizing subsidies and limiting inflated assessments, while any concerns would center on reduced local tax revenue, the fairness of special treatment for broadband providers, and the discretion given to counties to exempt property through negotiated agreements. No specific named opponents or objections appear in the provided record.