Government Affairs News

Government Affairs News from the Maryland General Assembly

Maryland Association of Realtors Priorities- HB 590/SB 657 -- Prohibit the Taxation of Forgiven Debt in Short Sales – SUPPORT Last fall, three counties (Anne Arundel, Prince George’s and Montgomery) implemented a policy that imposed recordation and/or transfer taxes on the forgiven debt in short sales transactions. HB 590/SB 657 make clear that recordation and transfer taxes may not be imposed on the forgiven debt in short sale transactions. Short sales, like other real estate transactions, may only be taxed on the consideration. The passage of this legislation follows an Attorney General Opinion issued at MAR’s Legislative Day that also deemed the Counties’ practices unlawful. STATUS: Passed – Effective on the date the Governor signs the bill into law. HB 1298/SB 666 -- Prohibit Private Transfer Fees – SUPPORT Several states have passed legislation prohibiting the imposition of private transfer fees on property. Similar to a ground rent, private transfer fees are typically created as a 99 year deed restriction that requires a buyer to pay a fee to the original seller of the property every time the property sells. Those fees can be as high as 1% of the purchase price. Developers and some individual sellers often share the revenue with the commercial entity that creates it. MAR believes PTFs reduce transparency in real estate transactions, impose complexity on transactions which will increase with time, and cost buyers money in higher closing costs and lost equity. HB 1298/SB 666 prohibits the imposition of PTFs on property in Maryland. STATUS: Passed – Effective on the date the Governor signs the bill into law. HB 62 -- Septic Legislation Correction - SUPPORT The Maryland General Assembly passed legislation in 2009 which required homeowners living in Maryland’s Critical Areas to install nitrogen reduction technology when replacing a failing septic system. Although the legislation was passed with the understanding that grants would cover the cost difference of the new technology, the Maryland Department of the Environment changed the loan terms forcing most families to incur thousands of dollars in extra costs. In response to the introduction of HB 62, MDE reversed course and is now providing full grants for the cost differential to those homeowners living in Maryland’s Critical Areas. HB 62 clarifies in statute that MDE must continue to provide full grants through 2012, at which time the grants and program funding will be reevaluated. STATUS: Passed – Effective October 1, 2010 HB 999/SB 686 -- Storm Water Management Fees - OPPOSE MAR opposed similar legislation last year. These bills would have required all residential and commercial properties to pay a stormwater “fee” even if those properties already manage all of their stormwater on-site. There are already multiple layers of tax on real property and MAR opposed these bills again this year. STATUS: Not Passed. HB 1209/SB 1083 -- Semi-Annual Taxation for Non Owner-Occupied Properties - SUPPORT All owner-occupied residential properties in Maryland pay their property taxes semi-annually or may choose to pay the full payment in advance. Non owner-occupied properties in Maryland, however, do not have the option of paying their property taxes semi-annually. Given the state of the economy, many businesses and investors would benefit from semi-annual payments. Although the Legislature was unwilling to pass HB 1209/SB 1083 as introduced, it passed a more limited semiannual bill which MAR also strongly supported. HB 484 requires counties to convert small business property to a semiannual tax payment schedule. A small business is a commercial property with a property tax bill of no more than $50,000 a year. STATUS: HB 484 Passed. Effective October 1, 2010. HB 1291/SB 952 -- Energy Disclosure for Maryland Properties - OPPOSE The Maryland Energy Administration introduced legislation to require the disclosure of utility bills to all homebuyers in Maryland. Although MAR was initially opposed to the specific approach taken by these bills, MAR worked with the Energy Administration on an alternative approach. However, those amendments were not ultimately accepted by the Committees and the legislation died. STATUS: Not Passed.

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