SB 480
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Enrolled - Revised
Senate Bill 480 (Senator Zucker)
Budget and Taxation Ways and Means
Tax Clinics for Low-Income Marylanders
This bill establishes a special fund and related processes to provide supplemental grant
funding for the University of Maryland School of Law, the University of Baltimore School
of Law, and the Maryland Volunteer Lawyers Service (MVLS) to operate tax clinics for
low-income State residents. For fiscal 2022 and 2023, the Comptroller must distribute
$250,000 from the State’s Unclaimed Property Fund to the new special fund. Beginning in
fiscal 2024, the Governor may include an appropriation for the fund in the annual budget
bill. Funds must then be distributed to the two law schools (one-third each) and MVLS
(one-third). The bill takes effect July 1, 2021, with the distribution of abandoned
property proceeds to the special fund terminating after December 31, 2023.
Fiscal Summary
State Effect: General fund revenues decrease by $250,000 in FY 2022 and 2023,
reflecting the distribution of proceeds from abandoned property to the new special fund;
general fund expenditures increase by an estimated $250,000 annually beginning in
FY 2024, assuming funding continues. Special fund revenues and expenditures increase
correspondingly as funds are received and distributed for the tax clinics. Higher education
revenues and expenditures increase by $166,700 annually, the portion of the funds to be
received and used by the law schools. This bill establishes a mandated distribution for
FY 2022 and 2023.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
GF Revenue ($250,000) ($250,000) $0 $0 $0
SF Revenue $250,000 $250,000 $250,000 $250,000 $250,000
Higher Ed Rev. $166,700 $166,700 $166,700 $166,700 $166,700
GF Expenditure $0 $0 $250,000 $250,000 $250,000
SF Expenditure $250,000 $250,000 $250,000 $250,000 $250,000
Higher Ed Exp. $166,700 $166,700 $166,700 $166,700 $166,700
Net Effect ($250,000) ($250,000) ($250,000) ($250,000) ($250,000)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: None.
Small Business Effect: None.
Analysis
Bill Summary/Current Law: The Tax Clinics for Low-Income Marylanders Fund
(TCLIM) is established as a special, nonlapsing fund to be administered by the
Comptroller. The purpose of the fund is to provide grants to the University of Maryland
School of Law, the University of Baltimore School of Law, and MVLS to operate tax
clinics for low-income Maryland residents. Money expended from the fund for this purpose
is supplemental and is not intended to take the place of funding that otherwise would be
appropriated for tax clinics. Expenditures from the fund may be made only in accordance
with the State budget. TCLIM consists of revenue distributed to it under the bill as well as
any money appropriated in the State budget or from any other source.
After making certain required distributions, the Comptroller must distribute the remaining
net funds from the State’s Unclaimed Property Fund to the general fund. The bill adds, for
fiscal 2022 and 2023 only, another distribution to TCLIM before the remaining net funds
are distributed to the general fund.
State Fiscal Effect: In fiscal 2022 and 2023 only, $250,000 in abandoned property
proceeds administered by the Comptroller is diverted to TCLIM to fund tax clinics.
Accordingly, general fund revenues decrease by $250,000 in fiscal 2022 and 2023 only. It
is assumed that the required distribution can be made with existing budgeted resources.
The Governor may include an appropriation for TCLIM in the annual budget bill beginning
in fiscal 2024; although such funding is not mandated, this analysis assumes that annual
funding for TCLIM is maintained at $250,000. Thus, general fund expenditures increase
by $250,000 annually beginning in fiscal 2024 to continue to fund tax clinics through
TCLIM. Special fund revenues and expenditures for TCLIM increase correspondingly as
funds are received and then distributed to the two law schools and MVLS. The Comptroller
can also administer TCLIM using existing resources.
Higher education revenues and expenditures for the two law schools increase by an
estimated $166,667 annually (approximately $83,333 each) beginning in fiscal 2022 from
distributions made by TCLIM and to provide supplemental funding for existing tax clinics
offered by the schools. Actual revenues depend on the annual funding appropriated to
MVLS after fiscal 2023. The schools advise that they intend to use the funds to provide
services for State tax returns, which support from existing federal funds does not allow.
SB 480/ Page 2
Use of the funds may include the hiring of full-time staff at one or both institutions but not
necessarily so.
Additional Comments: Both the University of Maryland and the University of Baltimore
schools of law operate low-income tax clinics funded by grants from the Internal Revenue
Service (IRS). MVLS is a nonprofit provider of pro bono legal services in the State and
offers a variety of legal services, including a low-income taxpayer clinic that assists with
IRS tax issues. The clinics do not help prepare tax returns; rather, they assist individuals in
dispute with the IRS. The clinics generally focus on issues related to federal, not State,
taxes.
The IRS awards matching grants of up to $100,000 per year to qualifying organizations to
develop, expand, or maintain a low-income taxpayer clinic. Such a clinic must provide
services for free or for no more than a nominal fee. At least 90% of the taxpayers the clinic
represents must qualify as low income, meaning households below 250% of federal poverty
guidelines. In addition, when a clinic represents a taxpayer, the dollar amount in
controversy for any tax year generally must not exceed $50,000.
Additional Information
Prior Introductions: HB 454 of 2020, a similar bill, passed the House with amendments
and was referred to the Senate Budget and Taxation Committee, but no further action was
taken.
Designated Cross File: HB 421 (Delegate Rosenberg) - Ways and Means.
Information Source(s): Comptroller’s Office; Judiciary (Administrative Office of the
Courts); Maryland Higher Education Commission; University System of Maryland;
Department of Legislative Services
Fiscal Note History: First Reader - January 27, 2021
an/rhh Third Reader - March 25, 2021
Revised - Amendment(s) - March 25, 2021
Revised - Clarification - March 25, 2021
Enrolled - May 10, 2021
Revised - Amendment(s) - May 10, 2021
Analysis by: Caroline L. Boice Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 480/ Page 3


Statutes affected:
Text - First - Income Tax Distribution – Tax Clinics for Low–Income Marylanders: 11-409 Tax General, 2-608.2 Tax General, 2-604 Tax General, 11-409 Tax General, 2-609 Tax General
Text - Third - Income Tax Distribution – Tax Clinics for Low–Income Marylanders: 11-409 Tax General, 2-608.2 Tax General, 2-604 Tax General, 11-409 Tax General, 2-609 Tax General
Text - Enrolled - Tax Clinics for Low-Income Marylanders: 11-409 Education, 1-206 Tax General, 2-608.2 Tax General, 2-608.2 Tax General, 2-604 Tax General, 11-409 Tax General, 2-609 Tax General, 17-101 Commercial Law, 17-317 Commercial Law, 11-916 Commercial Law