MD
Maryland Senate Bill SB904

Maryland 2023 Regular Session

Maryland Senate Bill SB904 Compare Versions

Only one version of the bill is available at this time.
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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
44 [Brackets] indicate matter deleted from existing law.
55 *sb0904*
66
77 SENATE BILL 904
88 N1 3lr3032
99 HB 1038/22 – JUD CF HB 225
1010 By: Senator A. Washington
1111 Introduced and read first time: February 15, 2023
1212 Assigned to: Rules
1313
1414 A BILL ENTITLED
1515
1616 AN ACT concerning 1
1717
1818 Foreclosure Proceedings – Residential Mortgagors and Grantors – Access to 2
1919 Counsel 3
2020
2121 FOR the purpose of requiring that certain individuals have access to legal representation 4
2222 in certain foreclosure proceedings; establishing the Access to Counsel in Foreclosure 5
2323 Proceedings Program and requiring the Maryland Legal Services Corporation, under 6
2424 the Program, to provide access to legal representation to certain individuals in 7
2525 foreclosure proceedings under certain circumstances; requiring the Maryland Legal 8
2626 Services Corporation to develop a certain pamphlet and the Commissioner of 9
2727 Financial Regulation to provide individuals in foreclosure proceedings with the 10
2828 pamphlet; requiring the Maryland Legal Services Corporation to designate certain 11
2929 community groups for a certain purpose; establishing the Access to Counsel in 12
3030 Foreclosure Proceedings Special Fund as a special, nonlapsing fund; requiring that 13
3131 the Comptroller collect certain fees on residential property sales and that the fees be 14
3232 paid to the Fund; authorizing a local jurisdiction to adopt certain local laws; and 15
3333 generally relating to the right to counsel in foreclosure proceedings. 16
3434
3535 BY adding to 17
3636 Article – Real Property 18
3737 Section 7–3A–01 through 7–3A–10 to be under the new subtitle “Subtitle 3A. Access 19
3838 to Legal Representation in Foreclosure Proceedings”; and 10–713 20
3939 Annotated Code of Maryland 21
4040 (2015 Replacement Volume and 2022 Supplement) 22
4141
4242 BY repealing and reenacting, without amendments, 23
4343 Article – State Finance and Procurement 24
4444 Section 6–226(a)(2)(i) 25
4545 Annotated Code of Maryland 26
4646 (2021 Replacement Volume and 2022 Supplement) 27
4747
4848 BY repealing and reenacting, with amendments, 28 2 SENATE BILL 904
4949
5050
5151 Article – State Finance and Procurement 1
5252 Section 6–226(a)(2)(ii)170. and 171. 2
5353 Annotated Code of Maryland 3
5454 (2021 Replacement Volume and 2022 Supplement) 4
5555
5656 BY adding to 5
5757 Article – State Finance and Procurement 6
5858 Section 6–226(a)(2)(ii)172. 7
5959 Annotated Code of Maryland 8
6060 (2021 Replacement Volume and 2022 Supplement) 9
6161
6262 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLA ND, 10
6363 That the Laws of Maryland read as follows: 11
6464
6565 Article – Real Property 12
6666
6767 SUBTITLE 3A. ACCESS TO LEGAL REPRESENTATION IN FORECLOSURE 13
6868 PROCEEDINGS . 14
6969
7070 7–3A–01. 15
7171
7272 (A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 16
7373 INDICATED. 17
7474
7575 (B) “COMMUNITY GROUP ” MEANS A NONPROFIT ENTITY W ITH THE 18
7676 CAPACITY TO CONDUCT OUTREACH TO MORTGAGO RS AND GRANTORS AND PROVIDE 19
7777 ENGAGEMENT , EDUCATION, AND INFORMATION . 20
7878
7979 (C) “COVERED INDIVIDUAL ” MEANS A MORTGAGOR OR GRANTOR WHO : 21
8080
8181 (1) OWNS AND OCCUPIES A R ESIDENTIAL PROPERTY AS THE 22
8282 MORTGAGOR OR GRANTOR ’S PRINCIPAL RESIDENC E; AND 23
8383
8484 (2) IS A MEMBER OF A HOUS EHOLD WITH AN INCOME THAT IS NOT 24
8585 GREATER THAN 50% OF THE MEDIAN INCOME IN THE STATE AS DETERMINED B Y THE 25
8686 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES OR ITS SUCCE SSOR. 26
8787
8888 (D) “DESIGNATED ORGANIZATION ” MEANS A NONPROFIT EN TITY 27
8989 DESIGNATED BY MLSC WITH THE ABILITY TO PROVIDE LEGAL REPRES ENTATION TO 28
9090 COVERED INDIVIDUALS . 29
9191
9292 (E) “FUND” MEANS THE ACCESS TO COUNSEL IN FORECLOSURE 30
9393 PROCEEDINGS SPECIAL FUND. 31
9494
9595 (F) “LEGAL REPRESENTATION ” INCLUDES AL L REPRESENTATION BY AN 32 SENATE BILL 904 3
9696
9797
9898 ATTORNEY BEYOND BRIE F LEGAL ADVICE AND I S NOT LIMITED TO THE FORMAL 1
9999 ENTRY OF APPEARANCE IN COURT. 2
100100
101101 (G) “MLSC” MEANS THE MARYLAND LEGAL SERVICES CORPORATION . 3
102102
103103 (H) “POSTFILE MEDIATION ” HAS THE MEANING STAT ED IN § 7–105.1 OF 4
104104 THIS TITLE. 5
105105
106106 (I) “PROGRAM” MEANS THE ACCESS TO COUNSEL IN FORECLOSURE 6
107107 PROCEEDINGS PROGRAM. 7
108108
109109 7–3A–02. 8
110110
111111 A COVERED INDIVIDUAL S HALL HAVE ACCESS TO LEGAL REPRESENTATION AS 9
112112 PROVIDED UNDER THIS SUBTITLE. 10
113113
114114 7–3A–03. 11
115115
116116 (A) THERE IS AN ACCESS TO COUNSEL IN FORECLOSURE PROCEEDINGS 12
117117 PROGRAM ADMINISTERED BY MLSC. 13
118118
119119 (B) THE PURPOSE OF THE PROGRAM IS TO ORGANIZ E AND DIRECT 14
120120 SERVICES AND RESOURC ES IN ORDER TO PROVI DE ALL COVERED INDIV IDUALS IN 15
121121 THE STATE WITH ACCESS TO LEGAL REPRESENTATION AS REQUIRED UNDER TH IS 16
122122 SUBTITLE. 17
123123
124124 7–3A–04. 18
125125
126126 (A) UNDER THE PROGRAM, MLSC SHALL PROVIDE FOR AC CESS TO LEGAL 19
127127 REPRESENTATION BY A COVERED INDIVIDUAL F OR PROCEEDINGS UNDER § 7–105.1 20
128128 OF THIS TITLE, INCLUDING THE FIRST APPEAL OF A DECISION IN THE PROCEEDING 21
129129 IF THE DESIGNATED OR GANIZATION DETERMINE S THAT THERE ARE SUFFIC IENT 22
130130 LEGAL GROUNDS FOR TH E APPEAL. 23
131131
132132 (B) (1) UNDER THE PROGRAM, A DESIGNATED ORGANIZ ATION SHALL 24
133133 ENSURE THAT A COVERE D INDIVIDUAL RECEIVE S ACCESS TO LEGAL 25
134134 REPRESENTATION BY AN ATTORNEY IN A PROCEE DING AS REQUIRED UND ER THIS 26
135135 SUBTITLE AS S OON AS POSSIBLE AFTE R A NOTICE OF INTENT TO FORECLOSE IS 27
136136 FILED WITH THE COMMISSIONER OF FINANCIAL REGULATION. 28
137137
138138 (2) THE COMMISSIONER OF FINANCIAL REGULATION SHALL 29
139139 PROVIDE A COPY OF TH E NOTICE OF INTENT D ESCRIBED UNDER THIS SUBSECTION 30
140140 TO MLSC. 31 4 SENATE BILL 904
141141
142142
143143
144144 (C) MLSC MAY CONTRACT WITH A D ESIGNATED ORGANIZATI ON TO 1
145145 PROVIDE ALL OR PART OF THE SERVICES REQU IRED UNDER THIS SECT ION. 2
146146
147147 7–3A–05. 3
148148
149149 (A) MLSC SHALL DEVELOP AN INF ORMATIONAL PAMPHLET IN BOTH 4
150150 ENGLISH AND OTHER LAN GUAGES MLSC DETERMINES APPROPRIA TE: 5
151151
152152 (1) DESCRIBING T HE LEGAL RIGHTS OF M ORTGAGORS AND 6
153153 GRANTORS AND THE ACC ESS TO COUNSEL ESTAB LISHED UNDER THIS SU BTITLE; 7
154154 AND 8
155155
156156 (2) PROVIDING INFORMATION ON RESOURCES AVAILAB LE TO 9
157157 MORTGAGORS AND GRANT ORS. 10
158158
159159 (B) THE COMMISSIONER OF FINANCIAL REGULATION SHALL PROV IDE A 11
160160 COPY OF THE PAMPHLET DESCRIB ED UNDER SUBSECTION (A) OF THIS SECTION TO 12
161161 MORTGAGORS AND GRANT ORS. 13
162162
163163 (C) MLSC SHALL POST A LINK TO AN ELECTRONIC VERSIO N OF THE 14
164164 PAMPHLET DESCRIBED U NDER SUBSECTION (A) OF THIS SECTION ON I TS WEBSITE. 15
165165
166166 7–3A–06. 16
167167
168168 MLSC SHALL DESIGNATE A ND CONTRACT WITH APP ROPRIATE COMMUNITY 17
169169 GROUPS TO CONDUCT OU TREACH AND PROVIDE E DUCATION TO MORTGAGO RS AND 18
170170 GRANTORS LOCALLY AND THROUGHOUT THE STATE REGARDING THE R IGHTS OF 19
171171 MORTGAGORS AND GRANT ORS AND THE ACCESS T O LEGAL REPRESENTATI ON 20
172172 UNDER THIS SUBTITLE . 21
173173
174174 7–3A–07. 22
175175
176176 ON OR BEFORE AUGUST 31 EACH YEAR, MLSC SHALL REPORT TO THE 23
177177 GOVERNOR AND THE GENERAL ASSEMBLY: 24
178178
179179 (1) THE NUMBER OF COVERED INDIVIDUALS PROVIDED LEGAL 25
180180 REPRESENTATION DURIN G THE PREVIOUS FISCA L YEAR; 26
181181
182182 (2) INFORMATION ON AND ME TRICS EVALUATING C ASE OUTCOMES ; 27
183183 AND 28
184184
185185 (3) A SUMMARY OF THE ENGAG EMENT AND EDUCATION OF 29 SENATE BILL 904 5
186186
187187
188188 MORTGAGORS AND GRANT ORS. 1
189189
190190 7–3A–08. 2
191191
192192 (A) THERE IS AN ACCESS TO COUNSEL IN FORECLOSURE PROCEEDINGS 3
193193 SPECIAL FUND. 4
194194
195195 (B) THE PURPOSE OF THE FUND IS TO PROVIDE FU NDING TO FULLY 5
196196 IMPLEMENT ACC ESS TO LEGAL REPRESE NTATION IN FORECLOSU RE PROCEEDINGS 6
197197 IN THE STATE. 7
198198
199199 (C) MLSC SHALL ADMINISTER THE FUND. 8
200200
201201 (D) MLSC SHALL USE THE FUND TO PROVIDE FUNDI NG FOR LEGAL 9
202202 SERVICES UNDER THIS TITLE. 10
203203
204204 (E) (1) THE FUND IS A SPECIAL , NONLAPSING FUND THAT IS NOT 11
205205 SUBJECT TO § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 12
206206
207207 (2) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , 13
208208 AND THE COMPTROLLER SHALL ACC OUNT FOR THE FUND. 14
209209
210210 (F) THE FUND CONSISTS OF : 15
211211
212212 (1) FEES PAID TO THE FUND UNDER § 10–713(B) OF THIS ARTICLE; 16
213213
214214 (2) MONEY APPROPRIATED IN THE STATE BUDGET TO THE FUND; 17
215215
216216 (3) INTEREST AND INVESTME NT EARNINGS OF THE FUND; AND 18
217217
218218 (4) ANY OTHER MONEY FROM ANY OTHER SOURCE ACC EPTED FOR 19
219219 THE BENEFIT OF THE FUND. 20
220220
221221 (G) THE FUND MAY BE USED ONLY FOR: 21
222222
223223 (1) SERVICES PROVIDED BY A DESIGNATED ORGANIZ ATION OR 22
224224 ACTIVITY BY A COMMUN ITY GROUP TO IMPLEME NT THE PROGRAM AS PROVIDED I N 23
225225 THIS SUBTITLE , INCLUDING ALL COSTS ASSOCIATED WITH REQU IRED LEGAL 24
226226 REPRESENTATION IN AN Y PROCEEDING AND ANY OUTREACH AND EDUCATI ON 25
227227 ACTIVITIES; 26
228228
229229 (2) IF A LOCAL JURISDICTI ON ENACTS A PROGRAM AUTHORIZED 27
230230 UNDER THIS SUBTITLE , SERVICES PROVIDED BY THE LOCAL JURISDICTI ON TO 28 6 SENATE BILL 904
231231
232232
233233 IMPLEMENT ACCESS TO COUNSEL IN FORECLOSU RE PROCEEDINGS AS PR OVIDED 1
234234 FOR IN THIS SUBTITLE , INCLUDING ALL COSTS ASSOCIATED WIT H REQUIRED LEGAL 2
235235 REPRESENTATION IN AN Y PROCEEDING AND ANY OUTREACH AND EDUCATI ON 3
236236 ACTIVITIES; 4
237237
238238 (3) ADMINISTRATIVE EXPENS ES OF MLSC; AND 5
239239
240240 (4) EXPENSES RELATED TO T HE STUDY AND EVALUAT ION OF: 6
241241
242242 (I) SERVICES AND ACTIVITI ES PROVIDED UNDER TH IS 7
243243 SUBTITLE; 8
244244
245245 (II) ADDITIONAL LEGAL SERV ICES THAT MAY BE PRO VIDED TO 9
246246 COVERED INDIVIDUALS FACING FORECLOSURE P ROCEEDINGS ; AND 10
247247
248248 (III) FUNDING AMOUNTS AND S OURCES NECESSARY TO FULLY 11
249249 EFFECTUATE ACCESS TO COUNSEL IN FORECLOSU RE PROCEEDINGS . 12
250250
251251 (H) (1) THE STATE TREASURER SHALL INVEST THE M ONEY OF THE FUND 13
252252 IN THE SAME MANNER A S OTHER STATE MONEY MAY BE IN VESTED. 14
253253
254254 (2) ANY INTEREST EARNINGS OF THE FUND SHALL BE CREDITE D TO 15
255255 THE FUND. 16
256256
257257 (I) EXPENDITURES FROM THE FUND MAY BE MADE ONLY IN ACCORDANCE 17
258258 WITH THE STATE BUDGET . 18
259259
260260 (J) MONEY EXPENDED FROM T HE FUND IS SUPPLEMENTAL TO AND IS NOT 19
261261 INTENDED TO TAKE THE PLACE OF FUNDING THA T OTHERWISE WOULD BE 20
262262 APPROPRIATED FOR CIV IL LEGAL SERVICES FR OM ANY OTHER SOURCE . 21
263263
264264 7–3A–09. 22
265265
266266 (A) LEGAL REPRESENTATION AS REQUIRED UNDER TH IS SUBTITLE SH ALL 23
267267 BE PHASED IN OVER TI ME IN A MANNER THAT MLSC DETERMINES APPROPRIA TE 24
268268 WITH THE GOAL OF FUL L IMPLEMENTATION BEF ORE OCTOBER 1, 2027. 25
269269
270270 (B) PRIORITY IN FUNDING D URING THE PHASE –IN PERIOD WILL BE GI VEN 26
271271 TO MORTGAGORS AND GR ANTORS IN A LOCAL JU RISDICTION THAT PROVIDES OR 27
272272 AGREES TO PROVIDE SI GNIFICANT ADDITIONAL LOCAL FUNDING TO EFF ECTUATE 28
273273 ACCESS TO COUNSEL IN FORECLOSURE PROCEEDI NGS IN THE LOCAL JUR ISDICTION. 29
274274
275275 (C) ACCESS TO LEGAL REPRE SENTATION UNDER THIS SUBTITLE IS 30 SENATE BILL 904 7
276276
277277
278278 SUBJECT TO THE AVAIL ABILITY OF FUNDING . 1
279279
280280 7–3A–10. 2
281281
282282 (A) A LOCAL JURISDICTION M AY ENACT A LOCAL LAW PROVIDING FOR 3
283283 LEGAL REPRESENTATION IN FORECLOSURE PROCE EDINGS FILED IN THE LOCAL 4
284284 JURISDICTION. 5
285285
286286 (B) IF A LOCAL JURISDICTI ON ENACTS A LOCAL LA W UNDER SUBSECTION 6
287287 (A) OF THIS SECTION PROV IDING FOR LEGAL REPRESENTATION IN FO RECLOSURE 7
288288 PROCEEDINGS SUBSTANT IALLY SIMILAR TO THA T DESCRIBED IN THIS SUBTITLE, 8
289289 MLSC SHALL DIRECT FUNDING THAT WOULD HAVE BEEN ALLOCATED UNDER THIS 9
290290 SUBTITLE FOR THE BEN EFIT OF COVERED INDI VIDUALS IN THE LOCAL 10
291291 JURISDICTION TO THE LOCAL PROGRAM. 11
292292
293293 10–713. 12
294294
295295 (A) THE COMPTROLLER SHALL COL LECT A FEE ON EACH R ESIDENTIAL 13
296296 PROPERTY SALE AS FOL LOWS: 14
297297
298298 (1) $25 ON A SALE OF LESS TH AN $200,000; 15
299299
300300 (2) $50 ON A SALE OF AT LEAS T $200,000 BUT LESS THAN $350,000; 16
301301
302302 (3) $100 ON A SALE OF AT LEAS T $350,000 BUT LESS THAN $500,000; 17
303303 AND 18
304304
305305 (4) $250 ON A SALE OF $500,000 OR MORE. 19
306306
307307 (B) FEES COLLECTED UNDER THIS SECTION SHALL B E PAID TO THE ACCESS 20
308308 TO COUNSEL IN FORECLOSURE PROCEEDINGS SPECIAL FUND ESTABLISHED 21
309309 UNDER § 7–3A–08 OF THIS ARTICLE. 22
310310
311311 Article – State Finance and Procurement 23
312312
313313 6–226. 24
314314
315315 (a) (2) (i) Notwithstanding any other provision of law, and unless 25
316316 inconsistent with a federal law, grant agreement, or other federal requirement or with the 26
317317 terms of a gift or settlement agreement, net interest on all State money allocated by the 27
318318 State Treasurer under this section to special funds or accounts, and otherwise entitled to 28
319319 receive interest earnings, as accounted for by the Comptroller, shall accrue to the General 29
320320 Fund of the State. 30
321321 8 SENATE BILL 904
322322
323323
324324 (ii) The provisions of subparagraph (i) of this paragraph do not apply 1
325325 to the following funds: 2
326326
327327 170. the Cannabis Public Health Fund; [and] 3
328328
329329 171. the Community Reinvestment and Repair Fund; AND 4
330330
331331 172. THE ACCESS TO COUNSEL IN FORECLOSURE 5
332332 PROCEEDINGS SPECIAL FUND. 6
333333
334334 SECTION 2. AND BE IT FURTHER ENACTED, That, if any provision of this Act or 7
335335 the application thereof to any person or circumstance is held invalid for any reason in a 8
336336 court of competent jurisdiction, the invalidity does not affect other provisions or any other 9
337337 application of this Act that can be given effect without the invalid provision or application, 10
338338 and for this purpose the provisions of this Act are declared severable. 11
339339
340340 SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 12
341341 October 1, 2023. 13
342342