Bill Summary – FastDemocracy

HB 1182
                        Department of Legislative Services
                                Maryland General Assembly
                                      2021 Session
                             FISCAL AND POLICY NOTE
                                  Enrolled - Revised
House Bill 1182                   (Delegate Kipke)
Ways and Means                                                             Budget and Taxation
                                  Tax - Property - Tax Sales
This bill requires a county tax collector to sell a property at a tax sale if, among other
requirements, the property is a vacant lot no more than 15 feet wide, the tax on the property
is in arrears for at least eight years, and a specified adjoining property owner petitions the
tax collector to sell the property. The bill takes effect July 1, 2021, and terminates
June 30, 2023.
                                       Fiscal Summary
State Effect: The bill is not expected to materially affect State finances.
Local Effect: The bill is not expected to materially affect local government operations or
finances.
Small Business Effect: Minimal.
                                            Analysis
Bill Summary: A tax collector must sell a property at a tax sale if (1) the property is a
vacant lot; (2) the tax on the property is in arrears for at least eight years; (3) the property
consists of a narrow strip of land that is no more than 15 feet wide and is surrounded on
two sides by adjoining property owned by the same property owner; (4) the property
prevents the owner of the adjoining property from connecting improvements that the
adjoining property owner wishes to make to the adjoining property owner’s property; and
(5) the adjoining property owner petitions the tax collector to sell the property. Upon
receipt of a petition, the tax collector must sell the property that is the subject of the petition
at the county’s next regularly scheduled tax sale.
Current Law: Subject to certain exceptions, State law requires a tax collector to sell,
through the tax sale process established in statute, all property in the county on which tax
is unpaid, at the time required by local law, but in no case, except in Baltimore City, later
than two years from the date the tax is in arrears.
However, State law includes various circumstances in which a property may or is required
to be withheld from sale. Those circumstances include, among others:
      A tax collector is permitted to withhold from sale any property, when the total taxes
       owed on a property, including interest and penalties, amount to less than $250 in
       any one year.
      A tax collector is permitted to withhold from sale any residential property, when the
       total taxes owed on a property, including interest and penalties, amount to less than
       $750.
      A tax collector, in Baltimore City, is required to withhold from sale owner-occupied
       residential property when the total taxes on the property, including interest and
       penalties, amount to less than $750. Additionally, in Baltimore City, a collector is
       required to withhold from sale a residential property or a property owned by a
       religious group or organization that is actually and exclusively used for public
       religious worship, a parsonage or convent, or educational purposes, if the taxes
       consist only of a lien for unpaid water and sewer charges.
      A governing body of a county or municipal corporation may withhold from sale a
       dwelling owned by a homeowner who is low income, at least 65 years old, or
       disabled if the homeowner meets eligibility criteria established by the county or
       municipal corporation.
For more information about the tax sale process, see the Appendix – Tax Sale Process.
                                Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Baltimore City; Harford, Montgomery, Talbot, and Wicomico
counties; Judiciary (Administrative Office of the Courts); Department of Legislative
Services
HB 1182/ Page 2
Fiscal Note History:   First Reader - March 5, 2021
rh/sdk                 Third Reader - March 24, 2021
                              Revised - Amendment(s) - March 24, 2021
                       Enrolled - May 7, 2021
                              Revised - Amendment(s) - May 7, 2021
Analysis by: Tyler Allard                        Direct Inquiries to:
                                                 (410) 946-5510
                                                 (301) 970-5510
HB 1182/ Page 3
                         Appendix – Tax Sale Process
In general, a tax collector must sell, at an auction, not later than two years from the date
the tax is in arrears, all property in the county on which the tax is in arrears. However, this
requirement does not apply in Baltimore City, and statute is silent as to any timeline for
the sale. The time for the tax sale is established by local law. Failure of the collector to sell
the property within the two-year period does not affect the validity or collectability of any
tax or the validity of any sale subsequently made.
The tax collector sets specified terms for the auction and publishes public notice of the
tax sale, including requirements for potential bidders.
When a property is purchased at a tax sale, the purchaser must pay to the tax collector any
delinquent taxes, penalties, sale expenses, and a high-bid premium, if any. The terms for
payment of the purchase price and high-bid premiums, if any, are determined by the
collector.
Generally, the property owner has the right to redeem the property within six months from
the date of the tax sale by paying the total lien amount on the property, delinquent taxes,
penalties, interest, and certain expenses of the purchaser. If the owner redeems the property,
the purchaser is refunded the amounts paid to the collector plus the interest and expenses.
If the owner does not redeem the property, the purchaser has the right to foreclose on the
property after the six-month right of redemption period has passed. Under most
circumstances, if the right to foreclose is not exercised by the purchaser within two years,
the certificate of sale is void, and the purchaser is not entitled to a refund of any monies
paid to the collector.
Chapter 440 of 2020 requires the State Department of Assessments and Taxation (SDAT)
to issue a report each year that includes an analysis and summary of the information
collected through an annual tax sale survey. Each county must provide SDAT all specified
information on the form that SDAT provides. For more information regarding tax sales in
the State – see 2020 Annual Maryland Tax Sale Report.
HB 1182/ Page 4
Statutes affected: 
Text - First - Tax - Property - Tax Sales: 14-808 Tax Property, 14-811 Tax Property
Text - Third - Tax - Property - Tax Sales: 14-808 Tax Property, 14-811 Tax Property
Text - Enrolled - Tax - Property - Tax Sales: 14-808 Tax Property, 14-811 Tax Property