EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0295*
SENATE BILL 295
Q3 5lr0826
CF HB 634
By: Senator McCray
Introduced and read first time: January 10, 2025
Assigned to: Education, Energy, and the Environment
Reassigned: Budget and Taxation, January 13, 2025
Committee Report: Favorable
Senate action: Adopted
Read second time: January 31, 2025
CHAPTER ______
AN ACT concerning 1
Income Tax – Income Tax Reconciliation Program – Established 2
(Maryland Fair Taxation for Justice–Involved Individuals Act) 3
FOR the purpose of establishing the Income Tax Reconciliation Program in the State to 4
allow certain justice–involved individuals to establish payment plans and receive a 5
waiver of any interest and penalties that accrue for unpaid income tax due for certain 6
taxable years; requiring the Comptroller to administer the Program and waive 7
certain interest and penalties for participants in the Program; requiring the 8
Comptroller, in collaboration with the Department of Public Safety and Correctional 9
Services, to develop an awareness campaign to inform the public and 10
justice–involved individuals about the Program; and generally relating to the Income 11
Tax Reconciliation Program for justice–involved individuals. 12
BY adding to 13
Article – Criminal Procedure 14
Section 6–237 15
Annotated Code of Maryland 16
(2018 Replacement Volume and 2024 Supplement) 17
BY adding to 18
Article – Tax – General 19
Section 2–120 20
Annotated Code of Maryland 21
(2022 Replacement Volume and 2024 Supplement) 22 2 SENATE BILL 295
BY repealing and reenacting, without amendments, 1
Article – Tax – General 2
Section 13–604 and 13–701(a) 3
Annotated Code of Maryland 4
(2022 Replacement Volume and 2024 Supplement) 5
BY repealing and reenacting, with amendments, 6
Article – Tax – General 7
Section 13–606 and 13–714 8
Annotated Code of Maryland 9
(2022 Replacement Volume and 2024 Supplement) 10
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12
Article – Criminal Procedure 13
6–237. 14
WHEN A DEFENDANT IS C ONVICTED OF OR PLEAD S GUILTY TO A CRIME AND IS 15
SENTENCED TO A TERM OF IMPRISONMENT OF A T LEAST 6 MONTHS BUT NOT MORE 16
THAN 10 YEARS, THE COURT SHALL INFORM THE DEFENDANT ABOUT THE INCOME 17
TAX RECONCILIATION PROGRAM ESTABLISHED U NDER § 2–120 OF THE TAX – 18
GENERAL ARTICLE. 19
Article – Tax – General 20
2–120. 21
(A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS 22
INDICATED. 23
(2) “JUSTICE–INVOLVED INDIVIDUAL” MEANS AN INDIVIDUAL WHO IS 24
CONVICTED OF OR PLEA DS GUILTY TO A CRIME AND IS CURRENTLY SERVING OR , 25
WITHIN THE IMMEDIATE LY PRECEDING 2 YEARS, HAS BEEN RELEASED AFTER 26
SERVING A TERM OF IMPRISONME NT OF AT LEAST 6 MONTHS BUT NOT MORE THAN 27
10 YEARS IN A STATE OR FEDERAL CORR ECTIONAL FACIL ITY. 28
(3) “PROGRAM” MEANS THE INCOME TAX RECONCILIATION 29
PROGRAM. 30
(B) THERE IS AN INCOME TAX RECONCILIATION PROGRAM IN THE STATE 31
THAT IS ADMINISTERED BY THE COMPTROLLER . 32
SENATE BILL 295 3
(C) THE PURPOSE OF THE PROGRAM IS TO ALLOW JUSTICE–INVOLVED 1
INDIVIDUALS WHO ARE UNABLE TO FILE A STATE INCOME TAX RETURN WH ILE 2
INCARCERATED TO: 3
(1) SUBJECT TO SUBSECTIO N (D) OF THIS SECTION , ESTABLISH 4
INSTALLMENT PAYMENT PLANS TO PAY ANY UNPAID INCOME TAX TH AT IS DUE FOR 5
ANY TAXABLE YEAR DURING WHICH THE INDIVIDUAL IS INCARCERATED ; AND 6
(2) IF APPROVED FOR A N INSTALLMENT PAYMENT PLAN , RECEIVE A 7
WAIVER FOR ANY INTEREST AND PENALTI ES THAT ACCRUE ON THE UNPAID INCOME 8
TAX. 9
(D) (1) FOR ANY TAXABLE YEAR THAT BEGINS AFTER DECEMBER 31, 10
2024, BUT BEFORE JANUARY 1, 2030, A JUSTICE–INVOLVED INDIVIDUAL WHO 11
RECEIVES A NOTICE OF ASSESSMENT OF INCOME TAX DUE FOR A TAXABL E YEAR 12
DURING WHICH THE IND IVIDUAL IS INCARCERA TED MAY APPLY TO THE 13
COMPTROLLER FOR AN INSTALLMENT PAYMENT PLAN . 14
(2) IF THE COMPTROLLER DETERMINE S THAT THE 15
JUSTICE–INVOLVED INDIVIDUAL IS ELIGIBLE TO PARTI CIPATE IN THE PROGRAM, 16
THE COMPTROLLER SHALL EST ABLISH AN INSTALLMEN T PAYMENT PLAN THAT 17
ALLOWS THE INDIVIDUA L TO PAY THE UNPAID INCOME TAX OVER A PE RIOD NOT 18
EXCEEDING 10 YEARS. 19
(3) IF A JUSTICE–INVOLVED I NDIVIDUAL IS APPROVED FOR A N 20
INSTALLMENT PAYMENT PLAN UNDER T HE PROGRAM, THE COMPTROLLER SHALL 21
WAIVE ANY INTEREST AND PENALTI ES THAT ACCRUE ON THE UNPAID INCOME TAX 22
DUE. 23
(E) (1) TO CARRY OUT THE PROGRAM, THE COMPTROLLER SHALL : 24
(I) IN COLLABORATION WIT H THE DEPARTMENT OF PUBLIC 25
SAFETY AND CORRECTIONAL SERVICES, DEVELOP AN AWARENESS CAMPAIGN TO 26
INFORM THE PU BLIC AND JUSTICE –INVOLVED INDIVIDUALS ABOUT THE PROGRAM; 27
AND 28
(II) ADOPT REGULATIONS . 29
(2) THE REGULATIONS REQUIRED UNDER PARAGRAPH (1)(II) OF THIS 30
SUBSECTION MAY INCLU DE INCOME LIMITATION S THAT ESTABLISH ELI GIBILITY 31
FOR THE PROGRAM. 32
4 SENATE BILL 295
(F) ON OR BEFORE DECEMBER 1, 2026, AND EACH DECEMBER 1 1
THEREAFTER , THE COMPTROLLER SHALL REPORT TO THE GENERAL ASSEMBLY, IN 2
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON THE 3
IMPACT OF THE PROGRAM. 4
13–604. 5
(a) The rate of interest for each month or fraction of a month is the percent equal 6
to one–twelfth of the annual interest rate that the Comptroller sets for the calendar year 7
under subsection (b) of this section. 8
(b) On or before October 1 of each year, the Comptroller shall set the annual 9
interest rate for the next calendar year on refunds and money owed to the State as the 10
percent that equals the greater of: 11
(1) (i) 13% for 2016; 12
(ii) 12% for 2017; 13
(iii) 11.5% for 2018; 14
(iv) 11% for 2019; 15
(v) 10.5% for 2020; 16
(vi) 10% for 2021; 17
(vii) 9.5% for 2022; and 18
(viii) 9% for 2023 and each year thereafter; or 19
(2) 3 percentage points above the average prime rate of interest quoted by 20
commercial banks to large businesses during the State’s previous fiscal year, based on 21
determination by the Board of Governors of the Federal Reserve Bank. 22
13–606. 23
(A) For reasonable cause, a tax collector may waive interest on unpaid tax. 24
(B) THE COMPTROLLER SHALL WAI VE THE AMOUNT OF ANY INTEREST 25
ASSESSED ON UNPAID I NCOME TAX DUE UNDER THIS ARTIC LE IF: 26
(1) THE UNPAID INCOME TAX IS DUE FOR A TAXABLE YEAR DURING 27
WHICH THE PERSON OWING IS INCARCERATE D; AND 28
SENATE BILL 295 5
(2) THE PERSON APPLIES FOR AND IS PLACED ON A N INSTALLMENT 1
PAYMENT PLAN UNDER T HE INCOME TAX RECONCILIATION PROGRAM 2
ESTABLISHED UNDER § 2–120 OF THIS ARTICLE. 3
13–701. 4
(a) Except as otherwise provided in this subtitle, if a person or governmental unit 5
fails to pay a tax when due under this article, the tax collector shall assess a penalty not 6
exceeding 10% of the unpaid tax. 7
13–714. 8
(A) For reasonable cause, a tax collector may waive a penalty under this subtitle. 9
(B) THE COMPTROLLER SHALL WAIVE A NY PENALTY UNDER THIS S UBTITLE 10
FOR A PERSON’S FAILURE TO PAY INCOM E TAX WHEN DUE UNDER THIS ARTICLE IF: 11
(1) THE UNPAID INCOME TAX IS DUE FOR A TAXABLE YE AR DURING 12
WHICH THE PERSON OWING IS INCARCERATED ; AND 13
(2) THE PERSON APPLIES FOR AND IS PLACED ON A N INSTALLMENT 14
PAYMENT PLAN UNDER THE INCOME TAX RECONCILIATION PROGRAM 15
ESTABLISHED UNDER § 2–120 OF THIS ARTICLE. 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 17
1, 2025. 18
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.