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HB 942

Economic Development - Tax Increment Financing - Noncontiguous Areas

2025 Regular Session Introduced by Matthew Schindler

Maryland bill expands Tax Increment Financing to include noncontiguous areas in single districts, allowing municipalities to pool tax revenue growth across separate locations for economic development projects.

Hearing 3/27 at 1:00 p.m.
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Bill Summary · HB 942

Legislative bill overview

HB 942 expands Maryland's Tax Increment Financing (TIF) program to allow noncontiguous areas to be included in a single TIF district. Previously, TIF districts required geographic continuity. This change permits municipalities to combine separate parcels or neighborhoods into one financing district, potentially pooling tax revenue increases across disparate locations.

Why is this important

Tax Increment Financing is a tool where increases in property tax revenue within a designated district are captured and reinvested in that district's infrastructure and development. Allowing noncontiguous areas significantly expands how municipalities can structure economic development strategies, potentially enabling them to use growth in one location to subsidize development in another. This could accelerate revitalization efforts but also raises concerns about cross-subsidization between communities.

Potential points of contention

  • Equity and fairness: Allowing municipalities to pool noncontiguous TIF revenue means property tax growth in affluent areas could fund development elsewhere, creating winners and losers among neighborhoods and raising questions about who benefits
  • Municipal finance complexity: Noncontiguous TIF districts are more administratively complex and harder for taxpayers to understand; the mechanism for allocating captured revenues across separate areas needs clear definition
  • School funding impact: TIF districts typically exclude education funding from the revenue capture pool, but expanding districts could affect how this exclusion works in practice and impact school budgets across larger geographic areas

Compiled from official sources — confirm details with the bill’s official record.

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