HB 172
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 172 (Chair, Environment and Transportation Committee)(By
Request - Departmental - Assessments and Taxation)
Environment and Transportation Judicial Proceedings
Real Property - Ground Leases - Repeal of Registration Fees
This departmental bill repeals provisions related to fees for the registration of ground leases
with the State Department of Assessments and Taxation (SDAT).
Fiscal Summary
State Effect: Special fund revenues decrease minimally beginning in FY 2021. Special
fund expenditures are not affected, but the bill results in operational efficiencies.
Local Effect: The bill does not materially affect local operations or finances.
Small Business Effect: SDAT has determined that this bill has minimal or no impact on
small business (attached). The Department of Legislative Services concurs with this
assessment. (The attached assessment does not reflect amendments to the bill.)
Analysis
Current Law/Background: Ground leases have been a form of property holding in
Maryland since colonial times. A ground lease creates a leasehold estate in the grantee that
is personal – not real – property. The grantor retains a reversion in the ground lease property
and fee simple title to the land. Ground leases generally have a 99-year term and are
renewable perpetually. Ground rent is paid to the grantor (the ground lease holder) for the
use of the property for the term of the lease in annual or semiannual installments. Under a
typical ground lease contract, the tenant agrees to pay all fees, taxes, and other costs
associated with ownership of the property.
Registration of a Ground Lease
Chapter 290 of 2007 established the registry of ground leases maintained by SDAT. The
registration fee is $10 for the first ground lease and $5 for each additional ground lease,
per ground lease holder. SDAT advises that repealing the fees associated with registration
allows for a more efficient use of resources by eliminating the need for staff to research
whether a filer has previously registered and, therefore, is entitled to the reduced $5 fee.
Because ground lease registrations are becoming increasingly obsolete, operational
efficiencies can be realized without materially affecting special fund revenues. According
to SDAT and as shown in Exhibit 1, 576 ground leases were registered in fiscal 2014. In
comparison, 100 ground leases were registered in fiscal 2019.
Exhibit 1
Ground Lease Registrations
Fiscal 2014-2019
600 576
500
445
400
300
261
211
200
156
100
100
0
2014 2015 2016 2017 2018 2019
Source: State Department of Assessment and Taxation
HB 172/ Page 2
State Revenues: Special fund revenues decrease minimally beginning in fiscal 2021 from
the elimination of registration fees. The average amount of special fund revenues
associated with ground lease registrations in fiscal 2018 and 2019 was $1,078. Assuming
that registration trend continues, special fund revenues decrease by similar amounts
beginning in fiscal 2021.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Baltimore City; Baltimore County; Judiciary (Administrative
Office of the Courts); State Department of Assessments and Taxation; Department of
Legislative Services
Fiscal Note History: First Reader - January 30, 2020
rh/jkb Third Reader - March 13, 2020
Revised - Amendment(s) - March 13, 2020
Analysis by: Donavan A. Ham Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 172/ Page 3
 ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Ground Leases – Registrations, Redemptions and Amendments – Fees
BILL NUMBER: HB 172
PREPARED BY: Jason Davidson, 410-767-5754, Jason.davidson2@maryland.gov
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
_X__ WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESS
OR
WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
The proposed bill will result in an average loss of $1,500 per Fiscal Year to the Department.
Amending the statute to expand expedited service could increase the number of transactions and
generate additional revenue.
HB 172/ Page 4


Statutes affected:
Text - First - Real Property - Ground Leases - Repeal of Registration Fees: 8-704 Real Property, 8-705 Real Property
Text - Third - Real Property - Ground Leases - Repeal of Registration Fees: 8-704 Real Property, 8-705 Real Property