1969]                               OF THE SENATE                                    17

Letter from Montgomery County Council

May 5, 1969.
The Honorable
Governor Marvin Mandel
State House
Annapolis, Maryland 21404

Re: Senate Bill 429
1969 General Assembly
Dear Governor Mandel:

By a vote of 4 to 3, at its meeting of April 29, the County Council for
Montgomery County instructed me to request that you veto Senate Bill 429
enacted in the recent session of the General Assembly.

This Bill would repeal a section of the Public Local Law which au-
thorizes the County Council to levy and impose taxes on the transfer of
fee simple interest in real property. The present statute authorizes rates
not to exceed specified amounts for three different classes of property:
Six percent of the value of the consideration for any transfer of land which
while owned by the transferor has been assessed at any time during the
five years preceding transfer on the basis of being actively devoted to farm
or agricultural use; six percent of the value of the consideration for any
transfer of real property which has been rezoned to a more intensive use
at the instance of the transferor or transferee excluding the value of im-
provements, construction, after event; one percent of value of the consid-
eration for any other transfer. The authorizations are in the disjunctive
and hence are not cumulative. The rates are the maximum rates which
may be imposed.

Senate Bill 429 would delete the section imposing the first of the
above-specified rates, specifically with respect to the property which has
been devoted to farm or agricultural use. It retains the other two classes
of transfer taxes. There is and has been in effect in Montgomery County
for a number of years a graduated transfer tax under the authority for
the one percent levy. The Council has enacted a six percent transfer tax
which would go into effect on July 1st under the first of the above classes,
that relating to farm assessment property.

This authority to levy six percent transfer tax on farm land assess-
ment property was granted to the Council by Chapter 633 of the Acts of
1968. It was the Council's understanding that it was granted in lieu of
enactment of any revisions in the Farm Land Assessment Law designed
to eliminate, reduce, or recoup substantial losses of local tax revenues by
operation of the preferential farm land assessments.

It was the understanding of the Council when Senate Bill 429 was
introduced that it was for the purpose of repealing the authority in event
that a Farm Assessment Law was passed providing an alternate source of
revenue for the County Government. Senate Bill 139 was enacted and
signed by you, making certain revisions in the Farm Land Assessment
Law and providing for a rollback on property taxes not to exceed a period
of three years nor five percent of the "full cash value" at the time of sale.

This Act, by its very terms, cannot provide any alternate source of
revenue for the Council prior to Fiscal Year 1971. Beginning in that year
it can provide one-third of the maximum contemplated under the Act,