Local Government Planning Frequently Asked Questions

​Click on the category (e.g. Priority Funding Areas) to expand. Then click on the question to expand for the answer.​

The Maryland Department of Planning will continue to add categories to the list below. If you have suggestions for categories, please contact Joe Griffiths, Local Assistance and Training Manager, at joseph.griffiths@maryland.gov.

Priority Funding Areas

Why did Maryland enact PFAs?

In 1997, the Maryland General Assembly passed "Smart Growth" legislation that created Priority Funding Areas.  This enactment followed the 1992 Economic Growth, Resource Protection, and Planning Act, which articulated Maryland's growth policy by establishing seven visions, which have since been expanded to twelve.  The 1997 legislation, now known as the Priority Funding Areas (PFA) Law, was enacted "to preserve existing neighborhoods and agricultural, natural, and rural resources; prohibiting state agencies from approving specified projects that are not in priority funding areas; providing for specified exceptions; establishing a certification process for the designation of eligible priority funding areas; requiring municipal corporations to adopt specified development standards and assist counties in the collection of fees to finance specified school construction; etc."  PFAs were established to focus the State's growth-related spending into existing communities and locally designated growth areas, thus ensuring a more efficient use of funding and limiting growth induced by the extension of infrastructure into areas better suited for preservation and limited growth.​​

What is the benefit of designating a land area as PFA? 

PFA's are designated by local jurisdictions as a policy statement that the local government prefers growth to occur in the designated area and wants to collaborate with State agencies to direct State resources into that area.  There are numerous benefits of PFA designation.  Locally, a PFA designation communicates to residents, business owners, and other stakeholders where a community would like to grow and invest.  At the State level, PFA designation provides access to a variety of growth-related funding, including for water and sewer infrastructure, transportation facilities, housing, business development tax credits, and neighborhood revitalization, among others.​

How is a PFA designated? What is the local process? Does this require a Public Hearing or Public Meeting and if so, what entity holds the hearing or meeting? 

The local designation process is determined by the jurisdiction and may be completed either administratively or legislatively;  State law does not establish any specific designation process or procedures and does not require any sort of public hearing on a proposed designation.  The Maryland Department of Planning recommends that a jurisdiction considering a PFA designation consult with the jurisdiction's attorney to ensure it follows proper local procedures.  When the Department of Planning receives a PFA designation, its does so under the assumption that the jurisdiction followed its local procedures and proceeds with its review accordingly.​

How difficult is it to designate a land area as a PFA? What are the state criteria for PFA designation?

The answer to this depends on whether the area to be designated meets the statutory criteria for PFA designation, set forth in State Finance and Procurement Article §5–7B–03. If it meets the criteria, the process is simple and only requires the submission of a PFA Certification request to the Maryland Department of Planning.  The PFA designation criteria differ based on the specifics and context of the area to be designated, but the standard requirements are: 1.) Zoning: if residentially zoned, the area must at least have a density of 3.5 dwelling units per acre. The zoning also qualifies if the area is zoned for employment uses, such as commercial, industrial, or institutional; 2.) Water and Sewer Plan: the area must be planned for sewer service in the 10-year water and sewer plan; and 3.) Growth Area: the area must be within a locally designated growth area. Please contact Joe Griffiths at joseph.griffiths@maryland.gov or the Regional Planner assigned to your jurisdiction if you have questions about whether an area qualifies for PFA designation as they can provide​ helpful input and guidance; for instance, there are provisions related to Rural Villages that cause rural community PFA designations to be somewhat complicated.​

What State Funding Programs are subject to the PFA Law? 

Department of Housing and Community Development:
The construction or purchase of newly constructed single-family homes by the Community Development Administration’s (CDA) Maryland Mortgage Program (MMP), which provides low interest mortgages to qualified first time homebuyers; the acquisition or construction of newly constructed multifamily rental housing (NMRH) by CDA; and State funded neighborhood revitalization projects, which include funding from Community Legacy (CL), Community Investment Tax Credit (CITC), Neighborhood Business Works (NBW) and Strategic Demolition and Smart Growth Impact Fund (SGIF). To be included in a DHCD designated Sustainable Community, an area must be in a PFA.

Department of General Services:
While it has no capital budget, General Services is responsible for acquiring, leasing, and maintaining most of the state’s facilities. Thus, it is responsible for ensuring that the state’s growth-related funding is limited to PFAs for state leases of property and land acquisition. However, the law explicitly exempts projects for “maintenance, repair, additions or renovations to existing facilities, acquisition of land for telecommunications towers, parks, conservation and open space, and acquisition of agricultural, conservation, and historic easements.” General Services sends every lease and project to Planning’s State Clearinghouse for Intergovernmental Assistance to ensure compliance with the PFA Law.

Department of Commerce:
The Maryland Small Business Development Financing Authority (MSBDFA), which provides financing for small businesses that do not qualify for financing from private lending institutions or owned by socially and economically disadvantaged persons; the Maryland Economic Development Assistance Authority and Fund (MEDAAF), which provides loans and grants to businesses and local jurisdictions; the Economic Development Opportunities Fund (Sunny Day Fund or SDF), which promotes Maryland’s participation in extraordinary economic development opportunities that provide significant returns to the state through creating and retaining employment as well as the creation of significant capital investments in PFAs; and the Maryland Economic Adjustment Fund (MEAF), which assists businesses with modernization of manufacturing operations, the development of commercial applications for technology and exploring and entering new markets.​

Department of the Environment:
The Maryland Water Quality Revolving Loan Fund (MWQRLF), which provides financial assistance to public entities and local governments for wastewater treatment plant upgrades, and other water quality and public health improvement projects, and to public or private entities for nonpoint source pollution prevention projects; the Water Supply Financial Assistance Program (WSFAP), which provides financial assistance to local government entities for the acquisition, construction, rehabilitation, and improvement of publicly-owned water supply facilities; the Supplemental Assistance Program (SAP), which provides grants to local governments for planning, design, and construction of needed wastewater facilities; and the Maryland Drinking Water Revolving Loan Fund (MDWRLF), which provides financial assistance to publicly and privately owned community water systems and nonprofit, non-community water systems for projects that address public health, public safety, environmental, or regulatory issues.  Additionally, certain sewer funded projects using the Bay Restoration Fund (BRF) may require compliance with the PFA Law and local government should discuss the applicability of the PFA Law on a BRF project with a representative of MDE.

Department of Transportation:
For Transportation, growth-related projects include all major capital projects defined as “any new, expanded, or significantly improved facility or service that involves planning, environmental studies, design, right-of-way, construction, or purchase of essential equipment related to the facility or service.” Transportation lists such projects in its Consolidated Transportation Program (CTP) as major projects and details the PFA status of each project as part of the annual report. The modal administrations of Transportation for which major capital projects are subject to PFA restrictions include: the State Highway Administration (Highways); the Maryland Transit Administration (Transit); the Maryland Aviation Administration (Aviation; the Maryland Port Administration (Port Administration); the Motor Vehicle Administration (Motor Vehicles); the Secretary’s Office. 

Maryland Historical Trust:
MHT, a division of Planning, gives preference to commercial applicants for the Historic Revitalization Tax Credit (HRTC) to projects that are located within PFAs. The program provides Maryland income tax credits equal to 20% of the qualified capital costs expended in the rehabilitation of a “certified heritage structure.” Projects involving “certified historic structures” that are high-performance commercial buildings or have been approved to receive Low Income Housing Tax Credits may be eligible to receive a 25% credit. Projects in a Qualified Opportunity Zone may earn an additional 5% credit (Level 1) or 7.5% credit (Level 2).


Conversely, what State Funding Programs are not subject to the PFA Law?

Most State funding, with the exceptions of those funding sources and programs listed above, are not subject to the PFA Law.  In addition, the PFA expressly exempts the following:

Department of General Services:
Project for maintenance, repair, additions, or renovations to existing facilities, acquisition of land for telecommunications towers, parks, conservation and open space, and acquisition of agricultural, conservation, and historic easements

Department of Housing and Community Development:
Any project financed with federal money used to purchase or rehabilitate existing single or multifamily housing or project financed with the proceeds of revenue bonds issued by the community Development Administration if the DHCD Secretary deems it meets certain criteria. 

Department of Natural Resources:
Acquisition of land by DNR under Title 1, Subtitle 1 of the Natural Resources Article

Department of Transportation:
Transportation projects pertaining to existing Maryland Transportation Authority facilities, studies currently in the project planning phase (pre-decisional), and Minor Capital Projects, and projects that preserve or rehabilitate existing facilities or services without increasing capacity.  Depending on the transportation project, such as projects without a specific location, some transportation projects may not be subject to the PFA Law.​

Is federal funding subject to the PFA law?

No, federal funding programs are not impacted by whether the project location is in a PFA. However, if a jurisdiction or other applicant wishes to leverage State funding with federal funding, then the project may be hindered if it is not located within a PFA. Please note though that DHCD also requires Community Development Block Grants be limited to PFAs, even though the funding source is the federal government. ​

What is the process for designating land area as a PFA? 

Designating an area as PFA is a local government action known as a PFA Certification.  A PFA Certification is an official letter from the jurisdiction stating local designation of an area as PFA, which includes the following information for the area designated: map and parcel number(s), applicable zoning, allowable residential density, water and sewer service area designations, comprehensive plan designated growth area status, and any other relevant information which led the local jurisdiction to determine that the area satisfies PFA designation criteria.  A jurisdiction must submit its PFA Certifcation letter and related documentation to the Maryland Department of Planning which will review the Certification for compliance with the PFA designation criteria; if it determines that the designated PFA satisfied the criteria, Plannng will send a PFA concurrence letter to the jurisdiction within 30 days.​

Who must sign a local PFA Certification that is submitted to Planning? 

Whomever the jurisdiction authorizes to sign a PFA Certification.  While this is typically a designee of a jurisdiction's executive branch, such as a planning director, town or county administrator, or mayor, it could also be a planning commission chairperson or a town or county attorney.  Jurisdictions should ensure that a properly authorized representative signs the PFA Certification.  Once received, Planning will process the PFA Certification with the understanding that the appropriate local process has been followed. ​

What happens if the State does not concur with a local PFA designation? 

PFAs are designated locally. The Maryland Department of Planning can neither designate a PFA nor remove a local PFA designation. However, State Finance and Procurement Article § 5-7B-08 enables the Department to comment on a locally designated PFA if the Department determines that the area does not meet PFA designation criteria.  If a jurisdiction submits a PFA Certification to the Department that does not meet one or more of the criteria for PFA designation, then the Department will classify the PFA as a "PFA Comment Area" on the Department's PFA map.  This classification communicates that the area has been designated locally but that, as determined by the Department, it does not meet one or more PFA requirements.  For the purpose of administering State funded programs that are subject to the PFA law, State agencies will take into consideration a PFA Comment Area classification when processing funding requests and have typically treated PFA Comment Areas as equivalent to non-PFA areas for purposes of funding determinations.  If a jurisdiction would like to remove a Comment Area classification, it should send an official letter to the Maryland Department of Planning, in a manner similar to a PFA Certification letter, requesting removal of the Comment.  The letter should provide supporting information as to why the area now meets State criteria for PFA designation.​

What is a PFA Exception and how do I request one? 

The PFA Law permits State funding for growth-related projects located outside the PFA if: (1) "it is required to protect public health or safety;" (2) the project "involves federal funds and compliance with [the PFA Law] would conflict or be inconsistent with federal law;” or (3) it is a “growth-related project related to a commercial or industrial activity, which, due to its operational or physical characteristics, shall be located away from other development.” The Smart Growth Coordinating Committee, which is a staff level working group of the the Governor's Smart Growth Subcabinet, is tasked with reviewing for approval requests for PFA exceptions based on these criteria.  Each funding agency that provides for PFA exceptions has its own procedure for requesting them. Please review this website​ to learn more about the Maryland Department of the Environment's procedure. ​

Is an area within municipal boundaries after annexation automatically PFA? 

No. The PFA Law as enacted in 1997 established as PFA all incorporated areas as of 1997.  However, the Law changed in 2006 to require any newly annexed areas to be evaluated against the PFA criteria.  This is often an area of confusion becuase some individuals think that all areas within a municipality are PFA.  As part of its 30-day annexation review, the Maryland Department of Planning will review all annexation areas for PFA eligibility.  The Department treats an annexation as a local PFA Certification request and if it determins that the annexation area meets the PFA criteria the Department will update the PFA map to include the annexation.  If an annexation area does not meet the PFA criteria, the Department will classify the area as a PFA Comment Area.  A municipality is not required to certify all annexation areas as PFA; the annexation review letters that the Department sends to municipalities prior to the public hearing on an annexation asks that the municipality contact the Department if it does not wish the area to be a PFA. If a municipality is annexing an area it wishes to not certify as a PFA, it should include that instruction in the annexation packet it submits to the department. For example, municipalities may not wish to certify parks or even agricultural lands within its incorporated boundaries. ​

Are PFAs and jurisdictional growth boundaries the same thing? Should they be the same thing? 

No, but they are connected.  Inclusion in a jurisdiction's growth area is one of three criteria that an area must meet to be designated as a PFA, the other two being a residential zoning density of at least 3.5 dwelling units per acre or zoning for employment, and existing or planned sewer service in the county's 10-year water and sewer plan. Whether or not PFA and growth boundaries fully align is a local decision. If growth and development in a portion of a growth area is not anticipated for many years, for example not within the next 10 years, then a jurisdiction may not need to designate all of it as PFA.  Meeting the other PFA criteria (zoning and planned for sewer service) may not be readily available for a variety of planning reasons.  However, if a jurisdiction anticipates that it may seek State growth related funding (e.g. infrastructure, housing) to support development within its growth area, proactively designating an area as PFA may prevent future delays in securing funding that is restricted to PFA. ​

If a jurisdiction applies for growth related funding and then discovers that the service area is not PFA, does that automatically mean that it will not receive funding? 

No, but it may be delayed. There are a few options for jurisdictions seeking growth related funding. The simplest option is to designate the area as PFA and submit a PFA Certification to Planning. Many jurisdictions include areas that meet the zoning, water and sewer service, and growth area requirements for designation but have never done the designation and submitted the PFA Certification.  Please see Planning's submissions webpage for more information on how to submit a PFA Certification.  If an area for which a jurisdiction is seeking growth related funding does not meet one or more of the criteria for PFA designation, the jurisdiction may want to consider an amendment to a local plan or ordinance to make it eligible.  Planning appreciates that this may not be an easy solution, particularly if it involves a rezoning, but it may be the best option in such situations.  An ineligibale area can be made eligible through: (1) a comprehensive plan amendment that adds the area to the locally designated growth area; (2) a water and sewer plan amendment that plans the area for service within the 10-year plan; (3) a rezoning to a residential density of 3.5 dwelling units per acre or an employment use; or (4) some combination thereof.  The other option if applicable is pursuing a PFA Exception, most commonly to address public health and safety issues.  You can learn more about the Maryland Department of the Environment's PFA Exception requirements​ and procedures here (Link to page in column C). For many situations, such as imminently failing septic systems, a PFA Exception may be the best option for a jurisdiction. However, a PFA Exception only allows a jurisdiction to receive growth related funding for a specific growth related funding request, and does not make an area a PFA or eligible for similar funding in the future. To ensure continued funding, the jurisdiction must designate the area as a PFA.  It is important to recognize when considering a PFA exception that undeveloped land itself does not constitute a public health and safety concern.

Who has the official PFA map and how often is it updated? 

Planning maintains the official PFA map​ that is used by other State agencies and jurisdictions to locate and review PFAs around the State. Planning updates the map following jurisdictional submissions of PFA Certifications.  If Planning concurs with a local designation, it will update the map to show the area as a PFA.  If Planning does not concur, it will update the map to show the area as a PFA Comment Area. Planning treats all annexations as PFA Certification requests and will show an annexed area, upon receiving documentation the annexation is recorded with the Department of Legislative Services, as either PFA or PFA Comment Area based on whether, as determined by Planning, the annexed area meets all the PFA criteria. ​

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