Urban Agriculture Property Tax Credit in Baltimore City: First Reader Committee Meeting at City Hall
In a public hearing before the Taxation, Finance and Economic Development Committee, members of Baltimore’s City Council heard discussion about the proposed Council Bill 14-0420 to implement an urban agriculture property tax credit. Councilmember William “Pete” Welch and others introduced the first draft of the bill, which was then referred to a number of Baltimore City agencies for comments.
The proposed bill would allow property owners to access a 90% credit in property taxes owed to the City of Baltimore if the property is used for urban agricultural purposes. In April 2014, the Maryland General Assembly passed a law enabling Maryland counties and Baltimore City to enact a tax credit that encourages the use of private property for one or more of five urban agricultural purposes. These purposes include
1) Crop production activities;
2) Environmental mitigation activities;
3) Community development activities, including recreational activities, food donations, and food preparation and canning classes;
4) Economic development activities, including employment and training opportunities, and direct sales to restaurants and institutions; and
5) Temporary produce stands selling on-site produce.
The proposed bill also limited this credit to urban agriculture projects that produce a minimum of $5,000.00 in agricultural products each year.
Prior to the October 1, 2014 hearing, each agency submitted its comments. The Department of Finance was the only agency that specifically opposed the tax credit, expressing concern that the credit could be abused. A representative of the Finance Department stated that, should the proposed tax credit be limited to properties that are exclusively used for urban agricultural purposes, the department would be more supportive of the proposal. After his statements, Abby Cocke of the Baltimore City Office of Sustainability took the floor and proposed a number of amendments to the bill under consideration. She said that these amendments were agreed upon between the Office of Sustainability and the Finance Department to both offices’ satisfaction. The amendments included
1) Adding definition in §10-18(A) for Urban Agricultural Products to further clarify what produce would be considered in calculating the $5,000 yearly yield.
2) Removing the words “for-profit” from §10-18(C)(B) to limit the credit only to those properties that are used for an urban agricultural purpose and “may not be used for any other purpose that would subject the parcel to property tax liability.”
3) Adding language in §10-18(G)(2) to require any owner of property receiving the tax credit to pay back-taxes plus interest if the property should cease to be used for urban agricultural purposes within the five-year credit term.
4) Switching department responsibilities in §10-18(H)(1) and §10-18(I)(1) to allow the Department of Finance control over “adopt[ing] rules and regulations to carry out this section, including the procedures, forms, and documentation required to apply for the credit and to periodically evidence continuing eligibility for the credit” and to require the Office of Sustainability to “analyze the public costs and benefits of the credits granted under this section and annually report … findings to the Board of Estimates and the City Council.”
Because these amendments were introduced orally, Committee Chair Councilmember Carl Stokes proposed that any vote be postponed until the Committee had a chance to review the new proposed bill in writing. He suggested that, at the conclusion of the hearing, he would order a recess, and the public hearing will resume at a later date for further discussion and a vote.
A representative from the Baltimore City Law Department then offered her trepidations about the bill as proposed originally. She too refrained from offering any final opinion on the bill until she has the chance to review the amended version in writing. However, the Law Department explained that any additional qualifications proposed in Council Bill 14-0420 contradict the enabling state law. The representative pointed out that, by limiting the applicability of the credit to properties that are only used exclusively for urban agricultural purposes, the Council Bill goes against the letter of the state law. She also suggested that the word “imposed” upon the property, when referring to taxes owed in the credit’s absence, be replaced with the word “due” because it allows the City more flexibility in case an error is made in the assessed taxes “imposed.”
A group from Johns Hopkins Global Obesity Prevention Center offered their support of the proposed bill by presenting evidence that an increased number of urban agriculture projects within the city of Baltimore could have a substantial positive effect on the number of Baltimore children with access to fresh fruits and vegetables and who will choose to consume fresh fruits and vegetables. Several community members, including Community Law Center, then added their input on the proposal. At the conclusion of the hearing, Committee Chair Stokes ordered the hearing take a recess until such time that the Office of Sustainability distributes the amended bill proposal to all interested parties. The date for the reconvened committee meeting has not yet been set.
More information about the state enabling legislation that gives Baltimore City the authority to create this tax credit is available here.
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