SB 931
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 931 (Senator Jackson)
Education, Health, and Environmental Affairs Appropriations
Prince George's County - School Facilities and Public Safety Surcharges and
Report - Sunset Extension and Report
This bill extends the termination date of Chapter 351 of 2019 from June 30, 2021, to
June 30, 2024. The bill also extends the submission date for a specified report from
December 1, 2020, to December 1, 2022. Finally, Prince George’s County must review
and make recommendations on whether the level of funding the county receives from the
school facilities surcharge and the public safety surcharge is sufficient to meet the needs of
the county and report its findings to the Prince George’s County Delegation to the
General Assembly by December 31, 2021. The bill takes effect July 1, 2021.
Fiscal Summary
State Effect: None.
Local Effect: Prince George’s County school facilities surcharge revenues continue to
decrease in FY 2022 through 2024. County expenditures for public school construction
projects are not directly affected; however, the proposed changes may reduce the amount
of revenue dedicated to public school construction projects.
Small Business Effect: None.
Analysis
Current Law: Chapter 351 of 2019 provided an exemption from the school facilities
surcharge for multifamily housing designated as student housing by Bowie State
University (BSU) and Prince George’s County that is located within one mile of BSU. In
addition, under specified circumstances, Prince George’s County may exempt some or all
of the school facilities surcharge for undergraduate student housing built west of
U.S. Route 1, north of Knox Road, and south of Metzerott Road.
The school facilities surcharge is reduced by 50% for multifamily housing projects, with a
building permit issued on or after April 1, 2019, constructed (1) within an approved transit
district overlay zone or (2) where there is no approved transit district overlay zone, within
one-quarter mile of a Metro Station or a Maryland Area Regional Commuter (MARC)
Station. This provision terminates June 30, 2021.
The school facilities surcharge does not apply to a dwelling unit that is a studio apartment
or an efficiency apartment if the dwelling unit is located (1) within the regional transit districts
and local centers (growth policy areas), as defined in the approved Prince George’s County
general plan (Plan 2035), including in the area of the approved 2010 Central US 1 Corridor
Approved Sector Plan and sectional map amendment; (2) within an approved transit district
overlay zone; or (3) where there is no approved transit district overlay zone, within
one-quarter mile of a Metro Station or a MARC Station. This provision terminates
June 30, 2021.
Prince George’s County may reduce the school facilities surcharge by a percentage up to
50% for dwelling units in multifamily housing constructed where there is no approved
transit district overlay zone, within one-quarter mile of a Purple Line station. This provision
terminates June 30, 2021.
Reporting Requirement
Chapter 351 also required Prince George’s County to (1) review and make recommendations
on the impact of the school facilities surcharge and the public safety surcharge and the need
for any changes to the surcharges, including whether changes to the school facilities
surcharge and the public safety surcharge might have a positive impact on the ability to
construct and maintain affordable housing and (2) report its findings to the Prince George’s
County Council, the Prince George’s County School Board, and the members of the
Prince George’s County Delegation to the General Assembly by December 1, 2020.
School Facilities Surcharge
For fiscal 2021, the school facilities surcharge is $16,748 for each building permit issued,
except for buildings that are exempt or subject to a reduced charge. The school facilities
surcharge is $9,770 for permits issued for buildings (1) located between interstate
highway 495 and the District of Columbia; and (2) included within a Basic Plan or
Conceptual Site Plan that abut existing or planned mass transit rail station sites operated
by the Washington Metropolitan Area Transit Authority.
SB 931/ Page 2
For fiscal 2020, the county collected approximately $29.5 million in school facilities
surcharge revenue.
For a further discussion of development impact fees and building excise taxes in Maryland,
see Appendix – Development Impact Fees and Building Excise Taxes.
Local Fiscal Effect: Prince George’s County revenues from the school facilities surcharge
continue to decrease in fiscal 2022 through 2024 depending on the number of eligible
properties impacted and the amount of the surcharge imposed on those properties. Any
reduction in surcharge revenues could result in less revenues dedicated to public school
construction projects in the county.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Prince George’s County; Maryland Department of
Transportation; State Department of Assessments and Taxation; Department of Legislative
Services
Fiscal Note History: First Reader - March 15, 2021
rh/hlb Third Reader - March 23, 2021
Revised - Amendment(s) - March 23, 2021
Analysis by: Michael Sanelli Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 931/ Page 3
 Appendix – Development Impact Fees and Excise Taxes
Development impact fees and building excise taxes are imposed in 15 counties in
Maryland. In addition, Dorchester County has enacted an excise tax but has temporarily
suspended collection of the charge. As shown in Exhibit 1, after reaching a peak of
$129.1 million in fiscal 2007, impact fee and excise tax revenues declined to $62.4 million
in fiscal 2009. Revenues have since returned to higher levels, with $201.2 million collected
in fiscal 2019. However, due to the current economic climate, local revenues from
development impact fees and excise taxes are expected to decline to $154.4 million in
fiscal 2020 and $149.7 million in fiscal 2021. Public services funded by these charges
include public school construction, libraries, community colleges, transportation, public
safety, parks and recreation, and water/sewer utilities.
Exhibit 1
Development Impact Fees and Excise Taxes
Maryland Counties
Fiscal 2006-2021
($ in Millions)
$250
$197.8 $201.2
$200
$178.2
$164.2
$155.4 $154.4
$149.4 $149.7
$150
$129.1 $130.5
$123.9
$104.4
$100 $90.7
$81.2
$77.6
$62.4
$50
$0
2007 2009 2011 2013 2015 2017 2019 2021
Source: Department of Legislative Services
SB 931/ Page 4
In a given county, other charges imposed on new development (while not accounted for
here as development impact fees or excise taxes) may also be directed partially or wholly
toward new or expanded facilities (e.g., water/sewer system development charges or
connection charges). In addition, a number of municipalities impose impact fees or similar
charges on new development.
A development impact fee is a regulatory measure designed to fund facilities specifically
required by new development projects in order to mitigate the impact of such development
on infrastructure or public facilities. However, there must be a reasonable connection
between the amount of the impact fee imposed and the actual cost of providing facilities to
the properties assessed. In order to justify the imposition of an impact fee, a jurisdiction
must conduct a study that measures the effects that new development will have on public
facilities. The amount of an impact fee is subject to judicial review. Moreover, the revenue
from the fee must be dedicated to substantially benefit the assessed properties. Thus, a
county cannot collect an impact fee in one geographic area and spend the funds in another
area.
A building excise tax is another means of raising revenue from new development. Unlike
a regulatory impact fee, the amount of an excise tax does not have to be closely related to
the actual cost of providing public facilities to serve new development. In addition, excise
tax revenues do not have to be spent to specifically benefit the properties that are taxed but
can generally be spent throughout the county.
Exhibit 2 shows the development impact fees and building excise tax rates applicable to a
single-family development for each county in fiscal 2019 through 2021. Exhibit 3 shows
the revenue collections for fiscal 2019 through 2021.
SB 931/ Page 5
 Exhibit 2
County Development Impact Fee and Excise Tax Rates1
Fiscal 2019-2021
County FY 2019 FY 2020 FY 2021
Anne Arundel2 $13,390 $13,793 $14,022
Baltimore3 0 0 1.5%/GSP
Calvert 12,950 12,950 12,950
Caroline4 5,000 5,000 5,000
Carroll 533 533 533
Charles 17,385 17,244 17,837
Dorchester5 0 0 0
Frederick6 15,515 14,813 15,318
Harford 6,000 6,000 6,000
Howard7 $2.72/sq. ft. $2.85/sq. ft. $6.26/sq. ft.
Montgomery8 45,159 50,697 50,697
Prince George’s9 24,101 24,583 24,657
Queen Anne’s $5.48/sq. ft. $5.58/sq. ft. $5.67/sq. ft.
St. Mary’s10 6,280 6,756 5,338
Talbot11 7,680 7,818 7,935
Washington $1.00/sq. ft. $1.00/sq. ft. $1.00/sq. ft.
1
Fees/rates listed are generally those applicable to single-family detached dwellings and
are per dwelling unless otherwise indicated.
2
Rates are for a 2,000-2,499 square foot residential unit. Residential rates vary by the
square footage of a unit.
3
In 2020, Baltimore County imposed a development impact fee on new residential
construction that is initiated on or after July 1, 2020, and a development impact surcharge
on new nonresidential construction that is initiated on or after July 1, 2020. GSP means
gross sales price.
4
Effective December 7, 2018, Caroline County’s development excise taxes for school
construction and agricultural land preservation were repealed and replaced with a
development impact fee. The amount of the impact fee is $5,000 per dwelling unit for
single-family and multifamily dwellings. The amount of the former development excise
tax for school construction was $5,000 per lot created by subdivision.
SB 931/ Page 6
5
The county development excise tax was previously suspended for a six-year period
ending on June 30, 2020. In June 2020, Dorchester County adopted an extension of the
excise tax suspension through June 2022, Bill No. 2020-3.
6
The rates shown reflect the public school and library impact fee total.
7
Fiscal 2019, 2020, and 2021 amounts represent the total of the roads tax amount
($1.40/sq. ft., $1.50/sq. ft., and 1.51/sq. ft., respectively) and the school surcharge amount
($1.32/sq. ft., $1.35/sq. ft., and 4.75/sq. ft., respectively, with lower rates in fiscal 2021 for
grandfathered senior and affordable housing). The fiscal 2021 school surcharge amount
increases to $6.25/sq. ft. beginning January 1, 2021.
8
Fiscal 2019 amount represents $23,062 for schools and $22,097 for transportation in the
“yellow” and “green” zones in the county. Fiscal 2020 and 2021 amounts represent $26,207
for schools and $24,490 for transportation in the “yellow” and “green” zones. (The
transportation rate is $19,591 in the “orange” zone and $7,838 in the “red” zone in both
fiscal 2020 and 2021.)
9
Fiscal 2021 amount represents $16,748 for school facilities and $7,909 for public safety.
A lower school facilities rate ($9,770 in fiscal 2021) applies inside the beltway and to
certain development near mass transit and a lower public safety rate ($2,638 in fiscal 2021)
applies inside the Transportation Service Area 1 as defined in the Prince George’s County
Approved General Plan and to certain development near mass transit.
10
Rates for fiscal 2019, 2020, and 2021 are for a dwelling of 1,200 to 2,399 square feet.
Rates vary by the square footage of a unit.
11
A lower rate ($6,853 in fiscal 2021) applies to development inside municipalities.
Source: Department of Legislative Services
SB 931/ Page 7
 Exhibit 3
County Development Impact Fee and Excise Tax Revenues
FY 2019-2020 FY 2020-2021
County FY 2019 FY 2020 FY2021 Difference % Difference Difference % Difference
Anne Arundel $32,733,712 $19,050,000 $21,775,600 -$13,683,712 -41.8% $2,725,600 14.3%
Baltimore1 0 0 0 0 0.0% 0 0.0%
Calvert 2,866,973 3,101,213 3,214,150 234,240 8.2% 112,937 3.6%
Caroline 165,805 194,818 150,000 29,013 17.5% -44,818 -23.0%
Carroll 255,993 175,862 158,276 -80,131 -31.3% -17,586 -10.0%
Charles 10,991,958 10,482,700 10,818,900 -509,258 -4.6% 336,200 3.2%
Dorchester2 0 0 0 0 0.0% 0 0.0%
Frederick 30,033,584 19,559,856 18,940,714 -10,473,728 -34.9% -619,142 -3.2%
Harford 3,438,000 3,500,000 1,750,000 62,000 1.8% -1,750,000 -50.0%
Howard 12,979,439 11,467,128 13,108,700 -1,512,311 -11.7% 1,641,572 14.3%
Montgomery 52,595,000 37,000,000 29,970,000 -15,595,000 -29.7% -7,030,000 -19.0%
Prince George’s 47,560,230 45,581,794 45,600,000 -1,978,436 -4.2% 18,206 0.0%
Queen Anne’s 2,004,178 1,640,900 2,274,880 -363,278 -18.1% 633,980 38.6%
St. Mary’s 3,088,099 1,690,000 960,000 -1,398,099 -45.3% -730,000 -43.2%
Talbot 493,881 333,700 378,700 -160,181 -32.4% 45,000 13.5%
Washington 1,954,055 600,000 600,000 -1,354,055 -69.3% 0 0.0%
Total $201,160,907 $154,377,971 $149,699,920 -$46,782,936 -23.3% -$4,678,051 -3.0%
1
Baltimore County imposes a development impact surcharge on new nonresidential construction and a development impact fee on new residential
construction that has been initiated on or after July 1, 2020. Due to the timing of collections, substantial revenues are not expected in fiscal 2021.
2
The county development excise tax is suspended. In June 2020, Dorchester County adopted an extension of the excise tax suspension through June 2022,
Bill No. 2020-3.
Source: Department of Legislative Services
SB 931/ Page 8


Statutes affected:
Text - First - Prince George's County - School Facilities and Public Safety Surcharges and Report - Sunset Extension: 10-192.01 [], 2-019 [], 21-246 []
Text - Third - Prince George's County - School Facilities and Public Safety Surcharges and Report - Sunset Extension and Report: 10-192.01 [], 2-019 [], 21-