EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0023*
HOUSE BILL 23
Q1 5lr1615
(PRE–FILED)
By: Delegates Fair, Charkoudian, Palakovich Carr, Pruski, Ruth, and Vogel
Requested: November 1, 2024
Introduced and read first time: January 8, 2025
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Property Taxes – Authority of Counties to Establish a Subclass and Set a 2
Special Rate for Commercial and Industrial Property 3
FOR the purpose of authorizing the Mayor and City Council of Baltimore City or the 4
governing body of a county to establish, by law, a subclass of real property consisting 5
of certain commercial and industrial property and to set a special property tax rate 6
for certain commercial and industrial property for the purpose of financing certain 7
transportation improvements or the approved budget of the county board of 8
education; requiring that the special rate shall be in addition to a certain general tax 9
rate, may not exceed a certain amount, and may not apply to the residential portion 10
of a mixed–use building that receives a certain exemption or credit; requiring the 11
Mayor and City Council of Baltimore City or the governing body of a county to grant 12
either a property tax exemption or a property tax credit against a special rate on 13
commercial and industrial property for the residential portion of a mixed–use 14
building; requiring the exemption or credit to be granted automatically under certain 15
circumstances; requiring a county to provide notice of the exemption or credit and 16
accept applications for the exemption or credit; authorizing the Mayor and City 17
Council of Baltimore City or the governing body of a county to grant a property tax 18
credit against a special rate on commercial and industrial property imposed on real 19
property owned or leased by certain businesses with fewer than a certain number of 20
employees; and generally relating to a special property tax rate for commercial and 21
industrial property. 22
BY repealing and reenacting, with amendments, 23
Article – Tax – Property 24
Section 6–202.1 and 6–302 25
Annotated Code of Maryland 26
(2019 Replacement Volume and 2024 Supplement) 27
BY adding to 28 2 HOUSE BILL 23
Article – Tax – Property 1
Section 7–402, 9–112, and 9–275 2
Annotated Code of Maryland 3
(2019 Replacement Volume and 2024 Supplement) 4
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – Tax – Property 7
6–202.1. 8
The Mayor and City Council of Baltimore City or the governing body of a county may 9
establish, by law, a subclass of real property consisting of: 10
(1) vacant lots [or] AND improved REAL property cited as vacant and unfit 11
for habitation or other authorized use on a housing or building violation notice; OR 12
(2) ALL REAL PROPERTY THAT IS ASS IGNED THE FOLLOWING LAND 13
USE CODES, AS DEFINED BY THE MARYLAND ASSESSMENT PROCEDURE MANUAL: 14
(I) COMMERCIAL ; 15
(II) INDUSTRIAL; 16
(III) COMMERCIAL /INDUSTRIAL CONDOMINI UM; 17
(IV) RESIDENTIAL/COMMERCIAL ; AND 18
(V) COMMERCIAL /RESIDENTIAL. 19
6–302. 20
(a) Except as otherwise provided in this section and after complying with § 6–305 21
of this subtitle, in each year after the date of finality and before the following July 1, the 22
Mayor and City Council of Baltimore City or the governing body of each county annually 23
shall set the tax rate for the next taxable year on all assessments of property subject to that 24
county’s property tax. 25
(b) (1) Except as provided in subsection (c) of this section and §§ 6–305 and 26
6–306 of this subtitle: 27
(i) there shall be a single county property tax rate for all real 28
property subject to county property tax except for operating real property described in § 29
8–109(c) of this article; and 30 HOUSE BILL 23 3
(ii) the county tax rate applicable to personal property and the 1
operating real property described in § 8–109(c) of this article shall be no more than 2.5 2
times the rate for real property. 3
(2) Paragraph (1) of this subsection does not affect a special rate prevailing 4
in a taxing district or part of a county. 5
(c) (1) (I) The Mayor and City Council of Baltimore City or the governing 6
body of a county may set a special rate for a vacant lot [or] AND improved REAL property 7
cited as vacant and unfit for habitation or other authorized use on a housing or building 8
violation notice. 9
[(2)] (II) On or before December 1 each year, the Mayor and City Council 10
of Baltimore City or the governing body of a county that enacts a special rate under 11
[paragraph (1)] SUBPARAGRAPH (I) of this [subsection] PARAGRAPH shall report to the 12
Department of Housing and Community Development and, in accordance with § 2–1257 of 13
the State Government Article, to the General Assembly on: 14
[(i)] 1. the special rate set under [paragraph (1)] 15
SUBPARAGRAPH (I) of this [subsection] PARAGRAPH ; 16
[(ii)] 2. the number of properties to which the special rate applies; 17
[(iii)] 3. the revenue change resulting from the special rate; 18
[(iv)] 4. the use of the revenue from the special rate; and 19
[(v)] 5. whether properties subject to the special rate are viable 20
for adaptive reuse, as defined in § 1–102 of the Housing and Community Development 21
Article, and plans to convert viable properties. 22
(2) (I) SUBJECT TO THE REQUIR EMENTS OF THIS PARAG RAPH, 23
THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE GOVERNING BODY OF 24
A COUNTY MAY SET A S INGLE SPECIAL RATE F OR ALL REAL PROPERTY THAT IS 25
ASSIGNED THE FOLLOWI NG LAND USE CODES , AS DEFINED BY THE MARYLAND 26
ASSESSMENT PROCEDURE MANUAL: 27
1. COMMERCIAL ; 28
2. INDUSTRIAL; 29
3. COMMERCIAL /INDUSTRIAL CONDOMINI UM; 30
4. RESIDENTIAL/COMMERCIAL ; AND 31 4 HOUSE BILL 23
5. COMMERCIAL /RESIDENTIAL. 1
(II) A SPECIAL RATE SET UND ER SUBPARAGRAPH (I) OF THIS 2
PARAGRAPH MAY BE IMP OSED ONLY: 3
1. WITHIN A SPECIAL TAX ING DISTRICT ESTABLISHED 4
FOR THE PURPOSE OF F INANCING THE COST OF STATE OR COUNTY 5
TRANSPORTATION IMPRO VEMENTS UNDER TITLE 21, SUBTITLE 7 OF THE LOCAL 6
GOVERNMENT ARTICLE; OR 7
2. ON A COUNTYWIDE BASI S FOR THE PURPOSE OF 8
FUNDING THE APPROVED BUDGET OF THE COUNTY BOARD OF EDUCATION . 9
(III) A SPECIAL RATE SET UND ER SUBPARAGRAPH (I) OF THIS 10
PARAGRAPH : 11
1. SHALL BE IN ADDITION TO THE GENERAL REAL 12
PROPERTY TAX RATE SE T UNDER SUBSECTION (B)(1) OF THIS SECTION; 13
2. MAY NOT EXCEED 12.5 CENTS FOR EACH $100 OF 14
ASSESSED VALUE ; AND 15
3. MAY NOT APPLY TO THE RESIDENTIAL PORTION OF A 16
MIXED–USE PROPERTY THAT RE CEIVES EITHER AN EXEMPTION FROM THE SPECIAL 17
RATE UNDER § 7–402 OF THIS ARTICLE OR A CREDIT AGAINST THE SPECIAL RATE 18
UNDER § 9–112 OF THIS ARTICLE. 19
(3) IF A COUNTY SETS A SP ECIAL PROPERTY TAX R ATE UNDER 20
PARAGRAPH (1) OR (2) OF THIS SUBSECTION , IT SHALL PROMPTLY SE ND A NOTICE 21
TO THE DEPARTMENT THAT INCLU DES: 22
(I) THE AMOUNT OF THE RATE; AND 23
(II) THE CLASS OF PROPERT Y TO WHICH THE RATE APPLIES. 24
7–402. 25
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 26
INDICATED. 27
(2) “MIXED–USE PROPERTY ” MEANS A PROPERTY THA T INCLUDES 28
BOTH: 29 HOUSE BILL 23 5
(I) A COMMERCIAL OR INDU STRIAL USE; AND 1
(II) A RESIDENTIAL USE . 2
(3) “PUBLICLY AVAILABLE RE CORDS” INCLUDES: 3
(I) VALUATION RECORDS OF THE DEPARTMENT ; 4
(II) COUNTY RECORDS , INCLUDING LICENSE OR PERMIT 5
RECORDS; AND 6
(III) ANY OTHER RECORD FRO M A GOVERNMENTAL OR PRIVATE 7
SOURCE THAT IS ACCES SIBLE TO A COUNTY AN D PROVIDES RELIABLE INFORMATION 8
ON THE USE OF PROPER TY. 9
(B) IF THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE 10
GOVERNING BODY OF A COUNTY SETS A SPECIA L RATE UNDER § 6–302(C)(2) OF THIS 11
ARTICLE, THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE GOVERNING 12
BODY OF THE COUNTY S HALL, BY LAW, GRANT EITHER : 13
(1) A CREDIT AGAINST THE SPECIAL RATE FOR THE ENTIRE 14
RESIDENTIAL PORTION OF A MIXED–USE PROPERTY IN ACCO RDANCE WITH § 9–112 15
OF THIS ARTICLE; OR 16
(2) AN EXEMPTION FROM THE SPECIAL RATE FOR THE ENTIRE 17
RESIDENTIAL PORTION OF A MIXED–USE PROPERTY IN ACCO RDANCE WITH THIS 18
SECTION. 19
(C) A COUNTY MAY CALCULATE THE EXEMPTION UNDER THIS SECTION : 20
(1) AS A PERCENTAGE OF A MIXED–USE PROPERTY ’S SPECIAL TAX 21
LIABILITY THAT IS EQ UAL TO THE PERCENTAG E OF THE TOTAL SQUAR E FOOTAGE 22
OF THE PROPERTY THAT IS USED FOR RESIDENT IAL PURPOSES; 23
(2) AS A PERCENTAGE OF A MIXED–USE PROPERTY ’S SPECIAL TAX 24
LIABILITY THAT IS EQUAL TO THE PERC ENTAGE OF THE TOTAL INCOME PRODUCED 25
BY THE PROPERTY THAT IS DERIVED FROM RESI DENTIAL USE; OR 26
(3) USING ANY OTHER REAS ONABLE METHOD THAT E NSURES THE 27
ENTIRE RESIDENTIAL P ORTION OF A MIXED –USE PROPERTY IS NOT SUBJECT TO THE 28
SPECIAL RATE. 29
6 HOUSE BILL 23
(D) THE EXEMPTION UNDER THIS SECTION C ONTINUES FOR AS LONG AS THE 1
SPECIAL RATE IS IN E FFECT. 2
(E) A COUNTY SHALL AUTOMAT ICALLY GRANT THE EXEMPTION UNDER THIS 3
SECTION WITHOUT REQU IRING AN APPLICATION FROM THE PROPERTY OW NER IF, 4
BASED ON PUBLICLY AV AILABLE RECORDS , THE COUNTY IS ABLE T O: 5
(1) IDENTIFY A MIXED –USE PROPERTY THAT IS SUBJECT TO THE 6
SPECIAL RATE; AND 7
(2) CALCULATE THE EXEMPTION DUE FOR THE RESIDENT IAL 8
PORTION OF THAT MIXE D–USE PROPERTY . 9
(F) (1) IF, BASED ON PUBLICLY AV AILABLE RECORD S, A COUNTY IS ABLE 10
TO IDENTIFY A MIXED –USE PROPERTY THAT IS SUBJECT TO THE SPECI AL RATE BUT 11
HAS INSUFFICIENT INF ORMATION TO CALCULAT E THE EXEMPTION DUE FOR THE 12
RESIDENTIAL PORTION OF THAT MIXED–USE PROPERTY , THE COUNTY MAY REQUE ST 13
ADDITIONAL INFORMATI ON FROM THE OWNER OF THE MIXED–USE PROPERTY TO 14
ENABLE THE COUNTY TO CALCULATE THE EXEMPTION DUE. 15
(2) IF AN OWNER OF A MIXE D–USE PROPERTY DOES NO T PROVIDE 16
THE INFORMATION REQU ESTED TO CALCULATE T HE EXEMPTION DUE, THE COUNTY 17
IS NOT REQUIRED TO G RANT THE EXEMPTION UNDER THIS SECTION T O THAT 18
MIXED–USE PROPERTY . 19
(G) A COUNTY SHALL ACCEPT APPLICATIONS FOR THE EXEMPTION UNDER 20
THIS SECTION FROM AN OWNER OF A MIXED –USE PROPERTY THAT IS NOT 21
AUTOMATICALLY GRANTE D AN EXEMPTION UNDER SUBSECTION (E) OF THIS 22
SECTION. 23
(H) (1) A COUNTY SHALL PROVIDE WRITTEN NOTICE OF TH E EXEMPTION 24
UNDER THIS SECTION T O THE OWNER OF EACH PROPERTY THAT IS SUB JECT TO THE 25
SPECIAL RATE AND IS NOT AUTOMATICALLY GR ANTED AN EXEMPTION UNDER 26
SUBSECTION (E) OF THIS SECTION. 27
(2) THE NOTICE SHA LL INCLUDE: 28
(I) A DESCRIPTION OF THE EXEMPTION UNDER THIS SECTION ; 29
AND 30
(II) INSTRUCTIONS ON HOW TO APPLY FOR THE EXEMPTION. 31
HOUSE BILL 23 7
(I) THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE 1
GOVERNING BODY OF A COUNTY MAY PROVIDE , BY LAW, FOR: 2
(1) REGULATIONS AND PROCEDU RES FOR THE APPLICAT ION AND 3
UNIFORM PROCESSING O F REQUESTS FOR THE EXEMPTION; AND 4
(2) ANY OTHER PROVISION NECESSARY TO CARRY O UT THE 5
EXEMPTION UNDER THIS SECTION . 6
9–112. 7
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEAN INGS 8
INDICATED. 9
(2) “MIXED–USE PROPERTY ” MEANS A PROPERTY THA T INCLUDES 10
BOTH: 11
(I) A COMMERCIAL OR INDU STRIAL USE; AND 12
(II) A RESIDENTIAL USE . 13
(3) “PUBLICLY AVAILABLE RE CORDS” INCLUDES: 14
(I) VALUATION RECORDS OF THE DEPARTMENT ; 15
(II) COUNTY RECORDS , INCLUDING LICENSE OR PERMIT 16
RECORDS; AND 17
(III) ANY OTHER RECORD FRO M A GOVERNMENTAL OR A 18
PRIVATE SOURCE THAT IS ACCESSIBLE TO A C OUNTY AND PROVIDES R ELIABLE 19
INFORMATION ON THE U SE OF PROPERTY . 20
(B) IF THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE 21
GOVERNING BODY OF A COUNTY SETS A SPECIA L RATE UNDER § 6–302(C)(2) OF THIS 22
ARTICLE, THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE GOVERNING 23
BODY OF THE COUNTY S HALL, BY LAW, GRANT EITHER: 24
(1) AN EXEMPTION FROM TH E SPECIAL RATE FOR THE ENTIRE 25
RESIDENTIAL PORTION OF A MIXED–USE PROPERTY IN ACCO RDANCE WITH § 7–402 26
OF THIS ARTICLE; OR 27
8 HOUSE BILL 23
(2) A CREDIT AGAINST THE SPECIAL RATE FOR THE ENTIRE 1
RESIDENTIAL PORTION OF A MIXED–USE PROPERTY IN ACCO RDANCE WITH THIS 2
SECTION. 3
(C) A COUNTY MAY CALCULATE T HE CREDIT UNDER THIS SECTION: 4
(1) AS A PERCENTAGE OF A MIXED–USE PROPERTY ’S SPECIAL TAX 5
LIABILITY THAT IS EQ UAL TO THE PERCENTAG E OF THE TOTAL SQUAR E FOOTAGE 6
OF THE PROPERTY THAT IS USED FOR RESIDENT IAL PURPOSES; 7
(2) AS A PERCEN TAGE OF A MIXED –USE PROPERTY ’S SPECIAL TAX 8
LIABILITY THAT IS EQ UAL TO THE PERCENTAG E OF THE TOTAL INCOM E PRODUCED 9
BY THE PROPERTY THAT IS DERIVED FROM RESI DENTIAL USE; OR 10
(3) USING ANY OTHER REAS ONABLE METHOD THAT E NSURES THE 11
ENTIRE RESIDENTIAL P ORTION OF A MIXED–USE PROPERTY IS NOT SUBJECT TO THE 12
SPECIAL RATE. 13
(D) THE CREDIT UNDER THIS SECTION CONTINUES FO R AS LONG AS THE 14
SPECIAL RATE IS IN E FFECT. 15
(E) A COUNTY SHALL AUTOMAT ICALLY GRANT THE CREDIT UNDER THIS 16
SECTION WITHOUT REQU IRING AN APPLICATION FROM THE PROPERTY OW NER IF, 17
BASED ON PUBLICLY AV AILABLE RECORDS , THE COUNTY IS ABLE T O: 18
(1) IDENTIFY A MIXED –USE PROPERTY THAT IS SUBJECT TO THE 19
SPECIAL RATE; AND 20
(2) CALCULATE THE CREDIT DUE FOR THE RESIDENT IAL PORTION OF 21
THAT MIXED–USE PROPERTY . 22
(F) (1) IF, BASED ON PUBLICLY AV AILABLE RECORDS , A COUNTY IS ABLE 23
TO IDENTIFY A MIXED –USE PROPERTY THAT IS SUBJECT TO THE SPECI AL RATE BUT 24
HAS INSUFFICIENT INF ORMATION TO C ALCULATE THE CREDIT DUE FOR THE 25
RESIDENTIAL PORTION OF THAT MIXED–USE PROPERTY , THE COUNTY MAY REQUE ST 26
ADDITIONAL INFORMATI ON FROM THE OWNER OF THE MIXED–USE PROPERTY TO 27
ENABLE THE COUNTY TO CALCULATE THE CREDIT DUE. 28
(2) IF AN OWNER OF A MIXE D–USE PROPE RTY DOES NOT PROVIDE 29
THE INFORMATION REQU ESTED TO CALCULATE T HE CREDIT DUE , THE COUNTY IS 30
NOT REQUIRED TO GRAN T THE CREDIT UNDER T HIS SECTION TO THAT MIXED–USE 31
PROPERTY. 32
HOUSE BILL 23 9
(G) A COUNTY SHALL ACCEPT APPLICATIONS FOR THE CREDIT UNDER THIS 1
SECTION FROM AN OW NER OF A MIXED –USE PROPERTY THAT IS NOT 2
AUTOMATICALLY GRANTE D A CREDIT UNDER SUB SECTION (E) OF THIS SECTION. 3
(H) (1) A COUNTY SHALL PROVIDE WRITTEN NOTICE OF TH E CREDIT 4
UNDER THIS SECTION T O THE OWNER OF EACH PROPERTY THAT IS SUB JECT TO THE 5
SPECIAL RAT E AND IS NOT AUTOMAT ICALLY GRANTED A CRE DIT UNDER 6
SUBSECTION (E) OF THIS SECTION. 7
(2) THE NOTICE SHALL INCL UDE: 8
(I) A DESCRIPTION OF THE CREDIT UNDER THIS SE CTION; AND 9
(II) INSTRUCTIONS ON HOW TO APPLY FOR THE CRE DIT. 10
(I) THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE 11
GOVERNING BODY OF A COUNTY MAY PROVIDE , BY LAW, FOR: 12
(1) REGULATIONS AND PROC EDURES FOR THE APPLI CATION AND 13
UNIFORM PROCESSING O F REQUESTS FOR THE C REDIT; AND 14
(2) ANY OTHER PROVISION NECESSARY TO CARRY O UT THE CREDI T 15
UNDER THIS SECTION . 16
9–275. 17
(A) IF THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE 18
GOVERNING BODY OF A COUNTY SETS A SPECIA L RATE UNDER § 6–302(C)(2) OF THIS 19
ARTICLE, THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE GOVERNING 20
BODY OF THE COUNTY M AY GRANT, BY LAW, A PROPERTY TAX CR EDIT AGAINST THE 21
SPECIAL RATE IMPOSED ON REAL PROPERTY OWNED OR LEASED BY A BUSINESS 22
THAT EMPLOYS 15 OR FEWER EMPLOYEES . 23
(B) THE MAYOR AND CITY COUNCIL OF BALTIMORE CITY OR THE 24
GOVERNING BODY OF A COUNTY MAY PROVIDE , BY LAW, FOR: 25
(1) THE AMOUNT AND DURAT ION OF THE TAX CREDI T; 26
(2) ADDITIONAL ELIGIBILI TY REQUIREMENTS FOR THE TAX CREDIT; 27
(3) PROCEDURES FOR THE A PPLICATION AND UNIFO RM PROCESSING 28
OF REQUESTS FOR THE TAX CREDIT; AND 29
10 HOUSE BILL 23
(4) ANY OTHER PROVISION NECESSARY TO CARRY O UT THE TAX 1
CREDIT UNDER THIS SE CTION. 2
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 3
1, 2025, and shall be applicable to all taxable years beginning after June 30, 2025. 4