Maryland Senate Bill 457

Passed on May 8, 2020, Maryland’s Senate Bill 457 authorizes local governments to establish and fund a Resilience Authority under local law, outlines the requirements to do so, and specifies the powers local governments may grant to an Authority. A Resilience Authority enables a local jurisdiction to flexibly organize funding structures for and manage large-scale infrastructure projects specifically aimed at addressing the effects of climate change, including sea-level rise, flooding, increased precipitation, erosion, and heatwaves. The law notes that “[c]ommunities in coastal states account for nearly half of the nation’s population and economic activity, and that cumulative damage to property in those areas could reach $3.5 trillion by 2060.” The power to establish these Authorities allows local governments to accelerate infrastructure financing, reduce implementation costs, and better adapt to climate change.

First, the law provides for a nonexclusive range of projects that can be funded to provide local governments with lots of tools to adapt to local flooding and heat. Funds can be used to support many types of resilience operations and infrastructure projects, including developing flood barriers, green spaces, and stormwater infrastructure and elevating buildings. An Authority may exercise whatever powers — except eminent domain — that are necessary to manage, acquire, or support infrastructure projects, including constructing, altering, or operating such infrastructure.

Second, the law allows for Resilience Authorities to draw on diversified funding options. This provision in the law will present Resilience Authorities with a lot of flexibility in deciding how to fund resilient infrastructure investments. The law enables an Authority to charge and collect non-tax-related fees for its services. Authorities may also issue or sell state or local tax-exempt bonds for projects. In addition, they may decide whether an Authority will be funded by state or local governments, or nonprofit contributions, or any combination thereof. The Authority may not, however, levy any taxes.

Local governments can also decide how to staff and employ the Authority, and how the budgetary and financial procedures of the Authority will be conducted. Notably, Resilience Authorities can be created by individual local governments or more than one county to fund infrastructure investments and facilitate climate adaptation on a regional scale.

An established Authority must provide an annual report to its local government and the state Senate Budget and Taxation Committee and the Senate Education, Health, and Environmental Affairs Committee. The report must describe the infrastructure projects being funded and the Authority’s sources of funding.

Senate Bill 457 was inspired by Annapolis’s City Dock project, a joint effort between the Anne Arundel County and the city, which will cost an estimated $50 million in renovations. A Senate Bill 457-established Authority may eventually be used to help pay for the costs of this project. City Dock is a popular waterside pier area which hosts many bars and restaurants, as well as some of Annapolis’ largest events.

 

Publication Date: May 8, 2020

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