Land Use - Transit-Oriented Development - Alterations (Maryland Transit and Housing Opportunity Act)

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0389*

SENATE BILL 389
R2, Q8 6lr0333
CF HB 894
By: The President (By Request – Administration) and Senators Augustine, Beidle,
Brooks, Charles, Harris, Hettleman, King, Lam, Love, and Zucker Gile, and
Zucker
Introduced and read first time: January 27, 2026
Assigned to: Finance and Education, Energy, and the Environment
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 4, 2026

CHAPTER ______

AN ACT concerning 1

Land Use – Transit–Oriented Development – Alterations 2
(Maryland Transit and Housing Opportunity Act) 3

FOR the purpose of providing for the automatic designation of certain transit –oriented 4
developments as enterprise zones , subject to certain conditions ; requiring the 5
Maryland Economic Development Corporation to prioritize certain redevelopment 6
projects when making loans under the Strategic Infrastructure Revolving Loan 7
Program; altering the authority of local legislative bodies to regulate land use 8
planning on land located near certain transit stations; delaying the collection of 9
certain development excise taxes and development impact fees for certain residential 10
real estate projects; adding the use of project labor agreements as a scoring 11
preference for projects financed by the Transit–Oriented Development Capital Grant 12
and Revolving Loan Fund; applying certain provisions of this Act retroactively; and 13
generally relating to transit–oriented development. 14

BY renumbering 15
Article – Economic Development 16
Section 5–709 17
to be Section 5–710 18
Annotated Code of Maryland 19
(2024 Replacement Volume and 2025 Supplement) 20

BY repealing and reenacting, without amendments, 21
2 SENATE BILL 389

Article – Economic Development 1
Section 5–701(a) and 10–134(b) 2
Annotated Code of Maryland 3
(2024 Replacement Volume and 2025 Supplement) 4

BY repealing and reenacting, with amendments, 5
Article – Economic Development 6
Section 5–701(d), 5–707(e)(1), and 10–134(d) 7
Annotated Code of Maryland 8
(2024 Replacement Volume and 2025 Supplement) 9

BY adding to 10
Article – Economic Development 11
Section 5–709 12
Annotated Code of Maryland 13
(2024 Replacement Volume and 2025 Supplement) 14

BY repealing and reenacting, without amendments, 15
Article – Land Use 16
Section 1–101(a) and (g) and 7–501(a) and (i) 17
Annotated Code of Maryland 18
(2012 Volume and 2025 Supplement) 19

BY repealing and reenacting, with amendments, 20
Article – Land Use 21
Section 1–401(b), 4–104, and 10–103(b) 22
Annotated Code of Maryland 23
(2012 Volume and 2025 Supplement) 24

BY adding to 25
Article – Local Government 26
Section 20–128 27
Annotated Code of Maryland 28
(2013 Volume and 2025 Supplement) 29

BY repealing and reenacting, with amendments, 30
Article – Transportation 31
Section 7–1204(b)(2) 32
Annotated Code of Maryland 33
(2020 Replacement Volume and 2025 Supplement) 34

SECTION 1. BE IT ENACTED BY THE GENER AL ASSEMBLY OF MARYLAND, 35
That Section(s) 5 –709 of Article – Economic Development of the Annotated Code of 36
Maryland be renumbered to be Section(s) 5–710. 37

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 38
as follows: 39
SENATE BILL 389 3

Article – Economic Development 1

5–701. 2

(a) In this subtitle the following words have the meanings indicated. 3

(d) “Enterprise zone” means an area: 4

(1) that meets the requirements of § 5 –704(a) of this subtitle and is 5
designated as an enterprise zone by the Secretary under § 5–704(b) of this subtitle; 6

(2) (I) DESIGNATED AS A TRAN SIT–ORIENTED DEVELOPMENT 7
UNDER § 7–101 OF THE TRANSPORTATION ARTICLE; AND 8

(II) THAT IS SERVED BY A RAIL TRANSIT STATION THAT 9
RECEIVES AT LEAST HOURLY SERVICE ON AVERAGE FROM 8:00 A.M. UNTIL 6:00 P.M. 10
MONDAY THROUGH FRIDAY; 11

[(2)] (3) designated as an enterprise zone by the United States 12
government under 42 U.S.C. §§ 11501 through 11505; or 13

[(3)] (4) designated as an empowerment zone or enterprise community by 14
the United States government under 26 U.S.C. §§ 1391 through 1397F. 15

5–707. 16

(e) (1) (i) Notwithstanding subsection (d) of this section, except for a 17
business entity certified to receive a property tax credit under § 9–103 of the Tax – Property 18
Article for a tax year begin ning before July 1, 2008, a business entity located in an 19
enterprise zone may not receive the incentives and initiatives set forth in subsection (a)(1) 20
and (2) of this section if the entity is located on land or within improvements owned by the 21
federal government, the State, a county, or a municipal corporation unless the business 22
entity has first utilized all applicable property tax exemptions under Title 7 of the Tax – 23
Property Article, including entering into any available payment in lieu of tax agreement. 24

(ii) Subparagraph (i) of this paragraph does not apply to a business 25
entity leasing land or improvements owned by the Maryland Economic Development 26
Corporation OR THE MARYLAND DEPARTMENT OF TRANSPORTATION. 27

5–709. 28

(A) (1) AN SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, AN AREA 29
DESIGNATED AS A TRAN SIT–ORIENTED DEVELOPMENT UNDER § 7–101 OF THE 30
TRANSPORTATION ARTICLE BEFORE OCTOBER 1, 2026, THAT IS SERVED BY A RAIL 31
TRANSIT STATION THAT RECEIVES AT LEAST HOURLY SERVICE ON AVERAGE FROM 32
4 SENATE BILL 389

8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH FRIDAY SHALL MAY AUTOMATICALLY 1
BE DESIGNATED AS AN ENTERPRISE ZONE UNDER THE PROVISIONS OF THIS 2
SUBTITLE NOTWITHSTANDING THE LIMIT ON THE NUMBER OF ENTERPRISE ZONES 3
THAT THE SECRETARY MAY DESIGNATE UNDER § 5–704(B) OF THIS SUBTITLE. 4

(2) THE LOCAL GOVERNMENT OR MULTICOUNTY AGENCY WITH LAND 5
USE AND PLANNING RES PONSIBILITY FOR THE AREA THAT REQUESTED THE AREA 6
BE DESIGNATED AS A T RANSIT–ORIENTED DEVELOPMENT SHALL APPROVE THE 7
DESIGNATION OF THE AREA AS AN ENTERPRISE ZONE. 8

(B) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , AN AREA 9
DESIGNATED AS A TRAN SIT–ORIENTED DEVELOPMENT UNDER § 7–101 OF THE 10
TRANSPORTATION ARTICLE ON OR AFTER OCTOBER 1, 2026, THAT IS SERVED BY A 11
RAIL TRANSIT STATION THAT RECEIVES AT LEA ST HOURLY SERVICE ON AVERAGE 12
FROM 8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH FRIDAY SHALL 13
AUTOMATICALLY BE DESIGNATED AS AN ENTERPRISE ZONE NOTWITHSTANDING THE 14
LIMIT ON THE NUMBER OF ENTERPRISE ZONES THAT THE SECRETARY MAY 15
DESIGNATE UNDER § 5–704(B) OF THIS SUBTITLE. 16

(2) (I) AT THE TIME A TRANSIT–ORIENTED DEVELOPMENT AREA IS 17
DESIGNATED, THE LOCAL GOVERNMENT OR MULTICOUNTY AGENCY WITH LAND USE 18
AND PLANNING RESPONS IBILITY FOR THE AREA THAT REQUESTED THE A REA BE 19
DESIGNATED AS A TRAN SIT–ORIENTED DEVELOPMENT MAY ELECT NOT TO 20
DESIGNATE THE AREA AS AN ENTERPRISE ZONE. 21

(II) AN ELECTION MADE UNDE R SUBPARAGRAPH (I) OF THIS 22
PARAGRAPH SHALL BE D ONE, IN WRITING , TO THE SUSTAINABLE GROWTH 23
SUBCABINET ESTABLISHE D UNDER § 9–1403 OF THE STATE GOVERNMENT 24
ARTICLE. 25

10–134. 26

(b) (1) There is a Strategic Infrastructure Revolving Loan Program in the 27
Maryland Economic Development Corporation. 28

(2) The purpose of the Program is to make loans for targeted investments 29
in real estate and infrastructure projects to support transformative place–making, enhance 30
transit–oriented development, enhance community development, and achieve inclusive and 31
equitable economic growth objectives, with a focus on bringing underutilized assets into 32
performance and generating revenue. 33

(d) (1) An applicant for a loan u nder this section shall submit to the 34
Corporation an application on the form that the Corporation requires. 35

(2) The application shall include: 36
SENATE BILL 389 5

(i) a detailed strategic plan for the targeted investment; 1

(ii) the amount of money required for the a ctivities described in the 2
strategic plan; 3

(iii) the money available to the applicant without financial assistance 4
from the Program; 5

(iv) the amount of financial assistance requested from the Program; 6

(v) information relating to the financial s tatus of the applicant, 7
including, if applicable: 8

1. a current balance sheet; 9

2. a profit and loss statement; and 10

3. credit references; and 11

(vi) any other relevant information that the Corporation requests. 12

(3) An applicant is eligible for a loan under the Program for projects located 13
in a sustainable community, priority funding area, or transit–oriented development area. 14

(4) The Corporation shall establish an Advisory Loan Committee to review 15
loan applications and make recommendations to the Corporation on approval. 16

(5) In making loans, the Corporation shall prioritize projects that: 17

(i) activate underutilized property owned by the government and 18
institutions; 19

(ii) REDEVELOP STATE–OWNED LAND CONTIGUOUS TO R AIL 20
TRANSIT STATIONS THAT IS OWNED BY THE STATE, BALTIMORE CITY, OR THE 21
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; 22

(III) offer significant development or redevelopment value; 23

[(iii)] (IV) leverage private investment; and 24

[(iv)] (V) have the potential for significant job growth or retention. 25

(6) Loans may be used: 26

(i) to acquire property, including vacant sites; 27
6 SENATE BILL 389

(ii) for design and development of a project; and 1

(iii) for rehabilitation, construction, and demolition. 2

Article – Land Use 3

1–101. 4

(a) In this division the following words have the meanings indicated. 5

(g) (1) “Legislative body” means the elected body of a local jurisdiction. 6

(2) “Legislative body” includes: 7

(i) the board of county commissioners; 8

(ii) the county council; and 9

(iii) the governing body of a municipal corporation. 10

1–401. 11

(b) The following provisions of this division apply to a charter county: 12

(1) this subtitle, including Parts II and III (Charter county – 13
Comprehensive plans); 14

(2) § 1–101(l), (m), and (o) (Definitions – “Plan”, “Priority funding area”, 15
and “Sensitive area”); 16

(3) § 1–201 (Visions); 17

(4) § 1–206 (Required education); 18

(5) § 1–207 (Annual report – In general); 19

(6) § 1–208 (Annual report – Measures and indicators); 20

(7) Title 1, Subtitle 3 (Consistency); 21

(8) Title 1, Subtitle 5 (Growth Tiers); 22

(9) § 4–104(c) (Limitations – [Bicycle parking)] PARKING); 23

(10) § 4–104(d) (Limitations – Manufactured homes and modular dwellings); 24

SENATE BILL 389 7

(11) § 4–104(E) (LIMITATIONS – MIXED–USE DEVELOPMENT); 1

(12) § 4–104(F) (LIMITATIONS – STATE–OWNED LAND LAND FOR 2
TRANSPORTATION USE); 3

[(11)] (13) § 4–208 (Exceptions – Maryland Accessibility Code); 4

[(12)] (14) § 4–210 (Permits and variances – Solar panels); 5

[(13)] (15) § 4 –211 (Change in zoning classification – Energy generating 6
systems); 7

[(14)] (16) § 4–212 (Agritourism); 8

[(15)] (17) § 4–213 (Alcohol production); 9

[(16)] (18) § 4–214 (Agricultural alcohol production); 10

[(17)] (19) § 4–215 (Pollinator–friendly vegetation management); 11

[(18)] (20) § 4–216 (Limitations – Family child care homes and large family 12
child care homes); 13

[(19)] (21) Title 4, Subtitle 5 (Accessory Dwelling Units); 14

[(20)] (22) § 5–102(d) (Subdivision regulations – Burial sites); 15

[(21)] (23) § 5–104 (Major subdivision – Review); 16

[(22)] (24) Title 7, Subtitle 1 (Development Mechanisms); 17

[(23)] (25) Title 7, Subtitle 2 (Transfer of Development Rights); 18

[(24)] (26) except in Montgomery Count y or Prince George’s County, Title 19
7, Subtitle 3 (Development Rights and Responsibilities Agreements); 20

[(25)] (27) Title 7, Subtitle 4 (Inclusionary Zoning); 21

[(26)] (28) Title 7, Subtitle 5 (Housing Expansion and Affordability); 22

[(27)] (29) § 8–401 (Conversion of overhead facilities); 23

[(28)] (30) for Baltimore County only, Title 9, Subtitle 3 (Single –County 24
Provisions – Baltimore County); 25

8 SENATE BILL 389

[(29)] (31) for Frederick County only, Title 9, Subtitle 10 (Single –County 1
Provisions – Frederick County); 2

[(30)] (32) for Howard County only, Title 9, Subtitle 13 (Single –County 3
Provisions – Howard County); 4

[(31)] (33) for Talbot County only, Title 9, Subtitle 18 (Single –County 5
Provisions – Talbot County); and 6

[(32)] (34) Title 11, Subtitle 2 (Civil Penalty). 7

4–104. 8

(a) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 9
INDICATED. 10

(2) “ADEQUATE PARKING STUD Y” MEANS A DATA –SUPPORTED 11
ANALYSIS PREPARED FO R A DEVELOPMENT BY A LOCAL JURISDICTION T O 12
EVALUATE WHETHER ONE OR MORE PARKING REQUIREMENTS, PARKING RATIOS, OR 13
PARKING MANAGEMENT S TANDARDS POTENTIALLY IMPOSED ON A DEVELOP MENT 14
ARE JUSTIFIED TO ADDRESS LOCAL PARKING ISSUES. 15

(2) (3) “MIXED–USE” HAS THE MEANING STAT ED IN § 7–501 OF 16
THIS ARTICLE. 17

(3) (4) [In this section, “modula r] “MODULAR dwelling” means a 18
building assembly or system of building subassemblies designed for habitation as a 19
dwelling for one or more individuals: 20

[(1)] (I) that includes the necessary electrical, plumbing, heating, 21
ventilating, and other service systems; 22

[(2)] (II) that is made or assembled by a manufacturer on or off the 23
building site for installation, or assembly and installation, on the building site; and 24

[(3)] (III) installed and set up according to the manufacturer’s instructions 25
on an approved foundation and support system. 26

(b) (1) The powers granted to a local jurisdiction under this subtitle do not: 27

[(1)] (I) grant the local jurisdiction powers in any substantive area not 28
otherwise granted to the local jurisdiction by any other public general or public local law; 29

[(2)] (II) restrict the local jurisdiction from exercising any power granted 30
to the local jurisdiction by any other public general or public local law or otherwise; 31
SENATE BILL 389 9

[(3)] (III) authorize the local jurisdiction or its officers to engage in any 1
activity that is beyond their power under any other public general or public local law or 2
otherwise; or 3

[(4)] (IV) preempt or supersede the regulatory authority of any unit of the 4
State under any public general law. 5

(2) SUBSECTIONS (C)(2) AND (E) OF THIS SECTION DO NOT APPLY TO: 6

(I) A RAIL STATION LOCAT ED ON THE CAMPUS OF AN 7
INSTITUTION OF HIGHER EDUCATION, AS DEFINED IN § 10–101 OF THE EDUCATION 8
ARTICLE; OR 9

(II) PROPERTY THAT: 10

1. IS PARTIALLY LOCATED OUTSIDE: 11

A. FOR THE PROVISIONS IN SUBSECTION (C)(2) OF THIS 12
SECTION, 0.25 MILES OF THE RAIL TRANSIT STATION; OR 13

B. FOR THE PROVISIONS I N SUBSECTION (E) OF THIS 14
SECTION, 0.5 MILES OF THE RAIL TRANSIT STATION; OR 15

2. IS IN AN AREA THAT WAS ZONED FOR SINGLE–FAMILY 16
RESIDENTIAL USE ON JANUARY 1, 2026. 17

(c) (1) (I) If a legislative body regulates off –street parking, the legislative 18
body shall require space for the parking of bicycles in a manner that the legislative body 19
considers appropriate. 20

[(2)] (II) A legislative body may allow a reduction in the number of 21
required automobile parking spaces based on the availability of space for parking bicycles. 22

(2) A EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION, 23
A LEGISLATIVE BODY OR OTHER LOCAL AGENCY W ITH LAND USE AUTHORI TY MAY 24
NOT IMPOSE A MINIMUM OFF–STREET PARKING REQUIREMENT ON A RESIDENTIAL 25
OR MIXED –USE DEVELOPMENT THAT IS LOCATED WITHIN 0.25 MILES OF A RAIL 26
TRANSIT STATION THAT RECEIVES AT LEAST HOURLY SERVICE ON AVERAGE FROM 27
8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH FRIDAY. 28

(3) (I) A LEGISLATIVE BODY OR OTHER LOCAL AGENCY WITH LAND 29
USE AUTHORITY MAY IMPOSE A MINIMUM OFF–STREET PARKING REQUIREMENT ON 30
A RESIDENTIAL OR MIXED–USE DEVELOPMENT THAT IS LOCATED WITHIN 0.25 MILES 31
10 SENATE BILL 389

OF A RAIL TRANSIT ST ATION THAT RECEIVES AT LEAST HOURLY SERV ICE ON 1
AVERAGE FROM 8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH FRIDAY IF: 2

1. THE LEGISLATIVE BODY OR OTHER LOCAL AGENC Y 3
HAS PERFORMED AN ADE QUATE PARKING STUDY WITHIN THE 3 YEARS PRIOR TO 4
THE SUBMISSION OF A DEVELOPMENT APPLICATION; AND 5

2. THE DEPARTMENT OF TRANSPORTATION 6
CONCURRED IN THE FINDINGS OF THE ADEQUATE PARKING STUDY. 7

(II) 1. THE DEPARTMENT OF TRANSPORTATION SHALL 8
PROVIDE ITS DECISION ON THE FINDINGS OF T HE ADEQUATE PARKING STUDY 9
WITHIN 45 DAYS AFTER THE FINDINGS ARE SUBMITTED TO THE DEPARTMENT. 10

2. FAILURE TO PROVIDE A DECISION WITHIN 45 DAYS 11
SHALL BE DEEMED AS THE DEPARTMENT OF TRANSPORTATION CONCURRING WITH 12
THE FINDINGS OF THE ADEQUATE PARKING STUDY. 13

(d) A legislative body may not prohibit the placement of a new manufactured 14
home or modular dwelling in a zone that allows single–family residential uses if the home 15
or dwelling: 16

(1) (i) meets the definition of modular dwelling under subsection (a) of 17
this section; or 18

(ii) meets the definition of a manufactured home in § 9–102(a) of the 19
Commercial Law Article and is, or will be after purchase, converted to real property in 20
accordance with Title 8B, Subtitle 2 of the Real Property Article; or 21

(2) is located on land: 22

(i) currently or previously owned by the federal government; 23

(ii) greater than 80 acres in size; and 24

(iii) that was the site of a former U.S. military reservation. 25

(E) A LOCAL JURISDICTION ’S ZONING REGULATIONS SHALL ALLOW 26
MIXED–USE DEVELOPMENT ON L AND DESIGNATED FOR R ESIDENTIAL USE OR 27
APPROPRIATE COMMERCIAL USE FOR MIXED–USE DEVELOPMENT WITHIN 0.5 MILES 28
OF A RAIL TRANSIT ST ATION THAT RECEIVES AT LEAST HOURLY SERV ICE ON 29
AVERAGE FROM 8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH FRIDAY. 30

(F) FOR STATE–OWNED LAND THAT IS OWNED BY THE STATE, BALTIMORE 31
CITY, OR THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY THAT IS 32
SENATE BILL 389 11

IN USE FOR A TRANSPORTATION PURPOSE CONTIGUOUS TO A RAIL TRANSIT STATION 1
THAT RECEIVES AT LEA ST HOURLY SERVICE ON AVERAGE FROM 8:00 A.M. UNTIL 2
6:00 P.M. MONDAY THROUGH FRIDAY, A LEGISLATIVE BODY O R OTHER LOCAL 3
AGENCY WITH LAND USE AUTHORITY MAY NOT IMPOSE LIMIT ATIONS OR 4
RESTRICTIONS ON LAND USE CLASSIFICATION , HEIGHT, OR SETBACK , OR ANY 5
SIMILAR REQUIREMENTS IF THE LAND IS SUBJE CT TO A TRANSIT –ORIENTED 6
DEVELOPMENT PLAN APPROVED BY THE DEPARTMENT OF TRANSPORTATION AND 7
DEVELOPED IN COORDINATION WITH THE LOCAL JURISDICTION. 8

(G) SUBSECTIONS (E) AND (F) OF THIS SECTION MAY NOT BE CONSTRUED TO 9
ALTER THE LAND USE AUTHORITY OF A LOCAL JURISDICTION GOVERNING: 10

(1) ENVIRONMENTAL OR NATURAL RESOURCES CONCERNS; 11

(2) PUBLIC HEALTH AND SAFETY CONSIDERATIONS; OR 12

(3) ADEQUATE PUBLIC FACILITIES ORDINANCES. 13

7–501. 14

(a) In this subtitle the following words have the meanings indicated. 15

(i) (1) “Mixed–use” means any combination of a residential use with a 16
recreational, office, dining, or retail use. 17

(2) “Mixed–use” does not mean any combination of a residential use with 18
an industrial or hazardous use. 19

10–103. 20

(b) The following provisions of this division apply to Baltimore City: 21

(1) this title; 22

(2) § 1–101(m) (Definitions – “Priority funding area”); 23

(3) § 1–101(o) (Definitions – “Sensitive area”); 24

(4) § 1–201 (Visions); 25

(5) § 1–206 (Required education); 26

(6) § 1–207 (Annual report – In general); 27

(7) § 1–208 (Annual report – Measures and indicators); 28
12 SENATE BILL 389

(8) Title 1, Subtitle 3 (Consistency); 1

(9) Title 1, Subtitle 4, Parts II and III (Home Rule Counties – 2
Comprehensive Plans; Implementation); 3

(10) § 4–104(c) (Limitations – [Bicycle parking)] PARKING); 4

(11) § 4–104(d) (Limitations – Manufactured homes and modular dwellings); 5

(12) § 4–104(E) (LIMITATIONS – MIXED–USE DEVELOPMENT); 6

(13) § 4–104(F) (LIMITATIONS – STATE–OWNED LAND LAND FOR 7
TRANSPORTATION USE); 8

[(12)] (14) § 4–205 (Administrative adjustments); 9

[(13)] (15) § 4–208 (Exceptions – Maryland Accessibility Code); 10

[(14)] (16) § 4–210 (Permits and variances – Solar panels); 11

[(15)] (17) § 4 –211 (Change in zoning classification – Energy generating 12
systems); 13

[(16)] (18) § 4–215 (Pollinator–friendly vegetation management); 14

[(17)] (19) § 4–216 (Limitations – Family child care homes and large family 15
child care homes); 16

[(18)] (20) Title 4, Subtitle 5 (Accessory Dwelling Units); 17

[(19)] (21) § 5–102(d) (Subdivision regulations – Burial sites); 18

[(20)] (22) Title 7, Subtitle 1 (Development Mechanisms); 19

[(21)] (23) Title 7, Subtitle 2 (Transfer of Development Rights); 20

[(22)] (24) Title 7, Subtitle 3 (Development Rights and Responsibilities 21
Agreements); 22

[(23)] (25) Title 7, Subtitle 4 (Inclusionary Zoning); 23

[(24)] (26) Title 7, Subtitle 5 (Housing Expansion and Affordability); and 24

[(25)] (27) Title 11, Subtitle 2 (Civil Penalty). 25
SENATE BILL 389 13

Article – Local Government 1

20–128. 2

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 3
INDICATED. 4

(2) “DEVELOPMENT EXCISE TAX” MEANS AN EXCISE TAX IMPOSED BY 5
A COUNTY OR MUNICIPA LITY ON THE CONSTRUC TION OR IMPROVEMENT OF A 6
BUILDING. 7

(3) “DEVELOPMENT IMPACT FE E” MEANS A FEE IMPOSED BY A 8
COUNTY OR MUNICIPALITY FOR THE PURPOSE OF FINANCING ANY OF THE CAPITAL 9
COSTS OF ADDITIONAL OR EXPANDED PUBLIC W ORKS, IMPROVEMENTS, AND 10
FACILITIES REQUIRED TO ACCOMMODATE NEW CONSTRUCTION OR DEVELOPMENT. 11

(4) “QUALIFYING RESIDENTIA L REAL ESTATE PROJ ECT” MEANS A 12
MIXED–USE DEVELOPMENT THAT: 13

(I) INCLUDES RESIDENTIAL UNITS; AND 14

(II) IS LOCATED WITHIN A TRANSIT–ORIENTED DEVELOPMENT 15
DESIGNATED UNDER § 7–101 OF THE TRANSPORTATION ARTICLE, WHERE THE 16
DEVELOPMENT IS SERVE D BY A RAIL TRANSIT STATION THAT RECEIVES AT LEAST 17
HOURLY SERVICE ON AVERAGE FROM 8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH 18
FRIDAY. 19

(B) THIS SECTION APPLIES ONLY TO: 20

(1) A COUNTY THAT: 21

(I) IS A CHARTER COUNTY THAT IMPOSES , BY LAW , 22
DEVELOPMENT IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES; 23

(II) IS A CODE COUNTY WIT H PUBLIC LOCAL LAWS THAT 24
REQUIRE THE PAYMENT OF DEVELOPMENT IMPAC T FEES , SURCHARGES, OR 25
DEVELOPMENT EXCISE TAXES; OR 26

(III) IS A COMMISSION COUNTY THAT: 27

1. HAS BEEN AUTHORIZED TO ENACT DEVELOPMENT 28
IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES; AND 29

14 SENATE BILL 389

2. HAS ENACTED , BY LOCAL LAW , DEVELOPMENT 1
IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES; AND 2

(2) A MUNICIPALITY THAT IMPOSES, BY LOCAL LAW , DEVELOPMENT 3
IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES. 4

(C) THIS SECTION DOES NOT APPLY TO A DEVELOPME NT EXCISE TAX OR 5
DEVELOPMENT IMPACT F EE IMPOSED FOR THE P URPOSE OF FUNDING TH E 6
CONSTRUCTION OF A CONNECTION TO A PUBLIC WATER OR SEWER SYSTEM. 7

(D) ANY DEVELOPMENT EXCIS E TAX OR DEVELOPMENT IMPACT F EE 8
IMPOSED ON A QUALIFY ING RESIDENTIAL REAL ESTATE PROJECT UNDER THE 9
AUTHORITY GRANTED IN THIS ARTICLE MAY NOT BE COLLECTED UNTIL AFTER: 10

(1) CONSTRUCTION OF THE QUALIFYING RESIDENTIAL REAL ESTATE 11
PROJECT IS COMPLETE; AND 12

(2) A CERTIFICATE OF OCCUPANCY, AN OCCUPANCY PERMIT, OR ANY 13
OTHER LOCAL EQUIVALENT HAS BEEN ISSUED FOR THE QUALIFYING RESIDENTIAL 14
REAL ESTATE PROJECT. 15

(E) NOTWITHSTANDING ANY O THER LAW , A COUNTY OR MUNICIPA LITY 16
THAT IMPOSES A DEVEL OPMENT EXCISE TAX OR DEVELOPMENT IMPACT FEE ON A 17
QUALIFYING RESIDENTI AL REAL ESTATE PROJE CT UNDER THE AUTHORI TY 18
GRANTED IN THIS ARTI CLE MAY REVOKE A CER TIFICATE OF OCCUPANC Y, AN 19
OCCUPANCY PERMIT, OR ANY OTHER LOCAL E QUIVALENT IF THE DEV ELOPMENT 20
EXCISE TAX OR DEVELO PMENT IMPACT FEE IS NOT PAID WITHIN A REAS ONABLE 21
TIME PERIOD SET BY THE COUNTY OR MUNICIPALITY. 22

Article – Transportation 23

7–1204. 24

(b) (2) The Sustainable Growth Subcabinet established under § 25
9–1406 of the State Government Article may establish: 26

(i) Different eligibility requirements and objective scoring 27
standards for different types of financial assistance; and 28

(ii) Scoring preferences for applications that demonstrate that the 29
proposed project will: 30

1. Enhance access to transit for low –income and mi nority 31
residents of the local jurisdiction; 32

SENATE BILL 389 15

2. Enhance access to transit in areas with affordable housing 1
and a diversity of job and educational opportunities; [or] 2

3. Encourage development around underdeveloped and 3
underutilized transit stations in transit–oriented developments; OR 4

4. USE PROJECT LABOR AGREEMENTS. 5

SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 6
as follows: 7

Article – Local Government 8

20–128. 9

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 10
INDICATED. 11

(2) “DEVELOPMENT EXCISE TAX” MEANS AN EXCISE TAX IMPOSED BY 12
A COUNTY OR MUNICIPA LITY ON THE CONSTRUC TION OR IMPROVEMENT OF A 13
BUILDING. 14

(3) “DEVELOPMENT IMPACT FE E” MEANS A FEE IMPOSED BY A 15
COUNTY OR MUNICIPALITY FOR THE PURPOSE OF FINANCING ANY OF THE CAPITAL 16
COSTS OF ADDITIONAL OR EXPANDED PUBLIC W ORKS, IMPROVEMENTS, AND 17
FACILITIES REQUIRED TO ACCOMMODATE NEW CONSTRUCTION OR DEVELOPMENT. 18

(4) “RESIDENTIAL REAL ESTA TE PROJECT ” MEANS A MIXED –USE 19
DEVELOPMENT THAT: 20

(I) INCLUDES RESIDENTIAL UNITS; AND 21

(II) IS LOCATED WITHIN A TRANSIT–ORIENTED DEVELOPMENT 22
DESIGNATED UNDER § 7–101 OF THE TRANSPORTATION ARTICLE, WHERE THE 23
DEVELOPMENT IS SERVE D BY A RAIL TRANSIT STATION THAT RECEIVE S AT LEAST 24
HOURLY SERVICE ON AVERAGE FROM 8:00 A.M. UNTIL 6:00 P.M. MONDAY THROUGH 25
FRIDAY. 26

(B) (1) THIS SECTION APPLIES ONLY TO: 27

(I) A COUNTY THAT: 28

1. IS A CHARTER COUNTY THAT IMPOSES , BY LAW , 29
DEVELOPMENT IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES; 30

16 SENATE BILL 389

2. IS A CODE COUNTY WIT H PUBLIC LOCAL LAWS THAT 1
REQUIRE THE PAYMENT OF DEVELOPMENT IMPAC T FEES , SURCHARGES, OR 2
DEVELOPMENT EXCISE TAXES; OR 3

3. IS A COMMISSION COUNTY THAT: 4

A. HAS BEEN AUTHORIZED TO ENACT DEVELOPMENT 5
IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES; AND 6

B. HAS ENACTED , BY LOCAL LAW , DEVELOPMENT 7
IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES; AND 8

(II) A MUNICIPALITY THAT IMPOSES, BY LOCAL LAW , 9
DEVELOPMENT IMPACT FEES, SURCHARGES, OR DEVELOPMENT EXCISE TAXES. 10

(2) THIS SECTION DOES NOT APPLY TO A DEVELOPMENT EXCISE TAX 11
OR DEVELOPMENT IMPAC T FEE IMPOSED FOR TH E PURPOSE OF FUNDING THE 12
CONSTRUCTION OF A CONNECTION TO A PUBLIC WATER OR SEWER SYSTEM. 13

(C) (1) ANY DEVELOPMENT EXCIS E TAX OR DEVELOPMEN T IMPACT FEE 14
IMPOSED ON A RESIDEN TIAL REAL ESTATE PRO JECT UNDER THE AUTHO RITY 15
GRANTED IN THIS ARTICLE MAY NOT BE COLLECTED UNTIL AFTER: 16

(I) CONSTRUCTION OF THE RESIDENTIAL REAL EST ATE 17
PROJECT IS COMPLETE; AND 18

(II) ALL REQUIREMENTS FOR A CERTIFICATE OF OCCUPANCY, 19
AN OCCUPANCY PERMIT , OR ANY OTHER LOCAL EQUIVALENT THA T HAS BEEN 20
ISSUED FOR THE RESIDENTIAL REAL ESTATE PROJECT HAVE BEEN MET. 21

(2) ANY EXCISE TAX OR DEV ELOPMENT IMPACT FEE IMPOSED ON A 22
RESIDENTIAL REAL ESTATE PROJECT MAY BE C OLLECTED AS A PRECONDITION TO 23
CONDUCTING A FINAL INSPECTION OF THE PROJECT, BUT NOT MORE THAN 30 DAYS 24
PRIOR TO THE DATE OF INSPECTION. 25

(D) NOTWITHSTANDING ANY O THER LAW , A COUNTY OR MUNICIPA LITY 26
THAT IMPOSES A DEVEL OPMENT EXCISE TAX OR DEVELOPMENT IMPACT FEE ON A 27
RESIDENTIAL REAL ESTAT E PROJECT UNDER THE AUTHORITY GRANTED IN THIS 28
ARTICLE MAY DENY , WITHHOLD, OR REVOKE A CERTIFIC ATE OF OCCUPANCY , AN 29
OCCUPANCY PERMIT, OR ANY OTHER LOCAL E QUIVALENT IF THE DEV ELOPMENT 30
EXCISE TAX OR DEVELO PMENT IMPACT FEE IS NOT PAID WITHI N A REASONABLE 31
TIME PERIOD SET BY THE COUNTY OR MUNICIPALITY. 32

SENATE BILL 389 17

SECTION 3. 4. AND BE IT FURTHER ENACTED, That § 4–104(e) of the Land Use 1
Article, as enacted by Section 2 of this Act, shall apply only to land use rezonings or actions 2
taken by a legislative body on or after the effective date of this Act. 3

SECTION 4. AND BE IT FURTHER ENACTED, That § 5 –709 of the Economic 4
Development Article, as enacted by Section 2 of this Act, shall apply retroactively to an 5
area designated prior to the effective date of this Act as a transit –oriented development 6
under § 7–101 of the Transportation Article and that is served by a rail transit station that 7
receives at least hourly service on average from 8:00 a.m. until 6:00 p.m. Monday through 8
Friday. 9

SECTION 5. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall take 10
effect October 1, 2027, contingent on the failure of Chapter ____ (S.B. 325) or Chapter ____ 11
(H.B. 548) of the Acts of the General Assembly of 2026, and if Chapter _____ (S.B. 325) or 12
Chapter ____ (H.B. 548) takes effect, Section 3 of this Act, with no further action required 13
by the General Assembly, shall be null and void. 14

SECTION 5. 6. AND BE IT FURTHER ENACTED, That , except as provided in 15
Section 5 of this Act, this Act shall take effect October 1, 2026. 16

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.