County proposes impact fee to replace excise tax
DENTON — The Caroline County commissioners at their meeting Tuesday, Aug. 28, introduced two bills that, if passed, will allow the county to collect impact fees on all new residential construction, including multi-unit buildings within town limits.
A public hearing on both bills is scheduled during the commissioners’ next meeting, 6:15 p.m. Tuesday, Sept. 11, in the meeting room in the Caroline County Circuit Courthouse, 109 Market St., Denton.
The proposed bills are the product of several months of discussions about how the county could collect fees on apartment buildings and townhouses, to offset the infrastructure needed to support those additional residents, specifically school construction.
Currently, the county only collects a $5,000 excise tax when a lot is created, not when a structure is built, said Chief of Staff Sara Visintainer.
The development impact fee proposed to replace that tax would also be $5,000, Visintainer said, but would allow the county to bill all new residential construction, in both incorporated and unincorporated areas, more uniformly and fairly.
State law does not allow counties to impose both an excise tax and an impact fee, so the first step is to repeal the existing excise tax.
Vice President Wilbur Levengood asked if the bill’s language makes it clear the county can still participate in the state’s agricultural land preservation program without the excise tax.
Visintainer said the state only requires matching funds from the county, but that money can come from the operating budget; it is not required to come from an excise tax.
Finance staff members are working on recommendations for where that funding should come from in the operating budget, she said.
“The money the county is forgoing by not being able to collect on these other types of construction far outpaces what the county currently collects on ag land preservation (via the excise tax),” Visintainer said.
The commissioners then voted unanimously to introduce the bill repealing the excise tax. The second step is adopting an impact fee. As currently written, the bill that would establish that fee would exempt farm lots, defined as coming from a parcel of at least 20 acres used for agricultural production, when transferred directly from the farmer to a child or grandchild.
Commissioner Dan Franklin said he would prefer to see that changed so any gift of land to a child or grandchild, no matter the size or use of the parcel, is exempt.
“If you had five acres and wanted to give an acre to your son, you should be able to without paying an impact fee,” Franklin said. “For a gift of land, there shouldn’t be an impact fee.”
Visintainer said that can be discussed for amendment during the bill’s upcoming readings; the act Aug. 28 would merely introduce the bill.
The commissioners then voted unanimously to introduce it.