State
The 2010 session of the Maryland General Assembly reached the halfway point on Friday, February 26. The final date for introduction of bills without suspension of the rules is March 8 and the committee reporting courtesy date, by which each chamber’s committees are to report their own bills, is March 23; the opposite chamber bill crossover date is March 29. The final day of the Session, or sine die, is April 12.
The bill count in the Senate is 1,067, with 5 joint resolutions, and in the House 1,484, with 13 joint resolutions. To date, little has been accomplished-- as of March 1, only two bills had passed. The legislators’ focus in the remainder of Session will remain on cutting the budget, and doing things which ”have no cost” to the State, e.g. tightening rules for sex offenders, improving anti-gang legislation, promoting greater transparency in the legislative process, and reforming campaign financing laws.
As to legislation, the Governor has introduced a package of “Green” bills, one of which is of particular interest to the AOBA membership:
SB 285 Smart, Green, and Growing - The Sustainable Communities Act of 2010 - Re-establishes the Heritage Structure Rehabilitation Tax Credit Program, now to be called the Sustainable Communities Tax Credit Program. The bill transforms the program into a traditional tax credit program which will not be subject to an annual appropriation; increases funding for the program by authorizing the Maryland Historical Trust to award $50 million in credits in FY 2011 through 2013; and expands and alters eligibility requirements for the program, including allowing non-historic properties to qualify for the credit.
For a commercial rehabilitation, the value of the tax credit may not exceed $3 million, or the maximum amount specified under the initial credit certificate; for all other types of rehabilitation, the credit may not exceed $50,000. If the tax credit exceeds the total tax liability payable by the person claiming it in the tax year, the unused amount may be carried forward for 10 tax years. The credit is refundable if: (1) the rehabilitation is a single-family, owner-occupied residence; (2) the rehabilitation is a commercial rehabilitation and the qualified rehabilitation expenditures do not exceed $250,000; or (3) the business entity is a nonprofit corporation and the qualified rehabilitation and the qualified expenditures do not exceed $250,000.
The tax credit may be claimed against the personal income tax, corporate income tax, and insurance premium tax. The credit may be allocated among the partners, members, or shareholders of an entity in any manner agreed to by those persons in writing. The Comptroller may adopt regulations to require that an entity, other than a corporation, claim the tax credit on the tax return filed by the entity.
AOBA is also tracking a number of other bills that impact the membership. Among them:
HB 106 and its companion bill SB 248 Civil Cases - Maryland Legal Services Corporation Fund - Surcharges This bill increases the surcharge on civil cases filed in circuit court, from a maximum of $25 to a maximum of $70. In the District Court, the maximum authorized surcharge increases from $5 to $10 for summary ejectment cases (non-payment of rent); and from $10 to $20 for all other civil cases. Money from the surcharge is to be deposited into the Maryland Legal Services Corporation (MLSC) Fund, which is used to finance civil legal services to indigent clients. The bill received a favorable vote without amendments from the Senate Judicial Proceedings Committee and is expected to easily receive approval of the full Senate. The House bill has not been voted on; however, with extensive lobbying efforts ongoing by AOBA and others, it is anticipated that the bill will be amended to reduce the surcharge.
HB 508 and HB 672 Real Property - Residential Leases - Interest on Security Deposits Both bills seek to alter the current interest rate of 3% required to be paid on a residential security deposit by, instead, making it the Federal Reserve Discount Rate in effect on January 1 of each year. The bills received little to no interest from the committee members during hearings on them.
Lead-Based (LBP) Paint Bills
Once again, efforts are being made to modify a nationally acclaimed program. Maryland’s Lead Paint Poisoning Prevention Program has virtually eliminated lead poisoning in children in Maryland; however, advocates continue to attempt to increase the regulatory burdens on rental housing providers:
HB 976 Reduction of Lead Risk in Housing Introduced at the request of the Maryland Department of the Environment (MDE), this bill attempts to second-guess a pending decision by the Court of Appeals in a case in which the Court is asked to declare Maryland’s LBP program unconstitutional. This bill would repeal those provisions of current law relating to certain qualified offers in connection with the liability of an owner of specified rental property. AOBA, along with a collation of housing providers, is opposing this bill.
HB 1041 The Lead Paint Reduction Act of 2010 Under this bill, certain parties in Baltimore City, Baltimore County, Prince George's County, and Anne Arundel County would be allowed to seek monetary damages for the abatement of nuisances under specified circumstances, including a condition related to LBP; and it would repeal other current law provisions in order to make it easier to grant standing to bring a civil action for a condition relating to LBP. A coalition of property owners is opposing this bill.
HB 1153/SB 504 Environment - Reducing Lead Risk in Housing - Lead Paint Dust Testing These bills require an owner of an affected property under the Reduction of Lead Risk in Housing Program to satisfy the risk reduction standard, at each change of occupancy, by passing the test for lead contaminated dust and performing the specified lead hazard reduction treatments, which would add significant costs to each turnover. AOBA is opposing this bill.
Bills Affecting Rental Housing
HB 1382/SB 554 Rental Housing - Protection for Victims of Domestic Violence and Sexual Assault These bills would require a property owner to allow for the early termination of a lease when a victim of domestic violence or sexual assault gives notice and presents documentation of their status to the property owner. They would also require a property owner to change the locks at the request of a victim, and seek to make such victims a “protected class” under fair housing law. AOBA is working with the bill sponsors in an attempt to increase protection of such victims, while not placing undue restrictions on the property owner and placing other residents in harm’s way.
HB 1081/SB 692 Condominiums - Conversion of Residential Rental Facilities - Expiration of Registration and Notice These bills will require a property owner to provide the notice and conversion rights to subsequent tenants-- granting them extraordinary rights that would otherwise be available only to the original tenants. AOBA is opposing these bills.
SB 853 Landlord and Tenant - Stay of Eviction - Reasons for Nonpayment Beyond Tenant's Control This bill would authorize a judge in an action for repossession of residential premises based on failure to pay rent to extend the time for surrender of premises up to 30 days after the trial; to do so, the employer of the tenant who is the major wage earner must certify that the tenant was laid off or furloughed for reasons beyond the tenant's control. The bill also authorizes an administrative judge of any district to stay the execution of a residential warrant of restitution for up to 30 days, under certain circumstances. AOBA is opposing this bill.
SB 243 Housing - Discrimination Based on Source of Income - Prohibitions This bill adds “source of income” (explicitly including Section 8 housing vouchers) to the prohibited bases on which decisions in real estate transactions may be made. AOBA testified in opposition to the bill, which now awaits a vote in the Senate Judicial Proceeding Committee.
SB 545 Assisted Housing - Protected Actions - Extended Leases for Seniors This bill, similar to one from the 2009 Session, seeks to extend mandatory leases for certain persons to 5 years, from the current 3 years.
SB 212 Residential Property - Prohibited Restrictions on Exercise of Free Speech Purporting to protect freedom of speech, this bill requires that a property owner allow access to private property by an outsider for canvassing. The Senator who introduced the bill was denied access to door-knock at various apartment and other coveted communities. AOBA testified in opposition to the bill but the Senate Committee passed it; the bill goes to the full Senate this week.
SB 399 Real Property - Abatement of Nuisance – Prostitution This bill, supported by AOBA, adds prostitution to the list of causes for an action to evict under the nuisance abatement statute.
Recycling
HB 982 Solid Waste Management - Recycling - Requirements This bill requires the Office of Recycling in the Department of the Environment to establish commodity-based solid waste reduction (bar and restaurant recycling programs) through recycling goals, and alters the recycling requirements for counties by requiring that their county plans include a bar and restaurant recycling program by October 1, 2011; full implementation would be required by January 1, 2020. The bill also includes a solid waste management fee to be used to implement the bar and restaurant recycling program. AOBA opposes the imposition of the fee.
Stormwater Management
Builders and local officials are mounting a campaign to delay or change new State rules aimed at reducing stormwater pollution. They believe the new rules going into effect May 4, 2010 will undermine Maryland’s Smart Growth policy by discouraging redevelopment in cities, towns and older suburbs, and that the mandates could encourage sprawl. Numerous other bills regarding the rules have been introduced, seeking to alter deadlines and grandfather existing projects and projects in the pipeline. AOBA is participating in the work groups.
HB 999/SB 686 Watershed Protection and Restoration Act These bills are of particular concern for the AOBA membership. They require each county and municipality to establish a stormwater user charge, the purpose of which is to generate sufficient revenues to fund specified local stormwater management activities. The charge must be a flat fee for all residential property owners and a higher rate, based on impervious surface area, for commercial properties. This bill was defeated during the 2009 Session, by one vote, on the third reading on the Senate floor. AOBA is again opposing them.
Utility Bills Abound
AOBA’s utility team is actively examining each utility bill and lobbying to prevent passage of bills giving suppliers access to customer account information and all other bills that would increase costs for ratepayers.
Early Victory - Prince George’s County Delegation Rejects Rent Stabilization
AOBA successfully defeated PG 421-2010/HB 557 Prince George’s County – Rent Stabilization – Residential Rental Units for the Elderly. This local bill, introduced by Prince George’s Delegate Braveboy (D), sought to authorize the County Council to enact rent stabilization for elderly residents. The bill received an unfavorable vote from the County’s House Delegation.
Bi-County
WSSC Accepts AOBA’s Unit Billing Count Amendments
Amendments to the WSSC Plumbing and Fuel Gas Code (2009 Edition) effective January 1, 2010 changed SP CUS 99-02, Section 3-6. They required that separate meters be installed in any mixed-use building, in order to allow for the separate registering and computation of residential and commercial water consumption in the building. The changes also altered the ADC formula by requiring that the total number of occupied residential dwellings be factored into the equation, and then allowed for existing multi-unit “mixed-use” properties to make use of this new formula -- but only if the building’s commercial uses are separately metered from residential, as set out in 111.5.8 of the WSSC Code. In any affected building which did not have separate commercial meters on January 1, the entire building’s consumption was to be billed thereafter at the (higher) commercial rate.
While attempting to determine what space WSSC considers a “commercial use” that triggers the defining of a building as “mixed use” for the purposes of this billing change, AOBA members and staff received numerous and inconsistent responses from the WSSC’s customer care unit. AOBA, seeking to resolve/clarify WSSC’s intent, met with General Manager Jerry Johnson and the Chief of Customer Care, Rudy Chow.
AOBA shared the various responses that had been received from WSSC staff and requested clarification of the definition of “commercial use.” Johnson and Chow recognized that the lack of a clear and consistent message on WSSC's part had created tremendous anxiety among the property owners, and stated that it was not WSSC’s intent to create a hardship for building owners.
The General Manager advised that it is “WSSC’s intent that 'commercial use' is defined as an income-generating, rented space”– a clarification that provided AOBA members some immediate relief on the matter of how far the new policy would actually extend-- and indicated that WSSC would immediately seek to ensure that a clear and consistent message is in place.
AOBA raised two additional concerns with General Manager Johnson: 1) the inadequate notice to customers about the regulation and its unrealistic effective date, and 2) the unreasonableness of adopting a requirement to separately meter buildings without making exceptions for unique features and circumstances that may make separate metering unreasonable or impossible.
Many building owners were unaware of the changes to the regulations and therefore, unable to comply by January 1; and for most owners aware of the date, the requirement to install separate meters within the time allotted was not possible, given the need to consult with engineers on how and where to install new meters and sub-meters, risers, piping etc. and to obtain permits. For these reasons, the General Manager was persuaded to work with AOBA on a request that the Commission modify the start date of the regulation and amend it to allow for alternatives to fairly and accurately measure the commercial use water when the burden of separately metering is not reasonable.
On February 17, the WSSC Commissioners adopted AOBA’s requested amendments to the regulations regarding unit count billing procedures. First, the Commission delayed the effective date until 12-31-2010; second, it added a definition of “commercial unit” making clear that a commercial unit is a unit whose principal purpose is transacting for-profit business with the public, and that spaces whose principal purpose is to benefit residents of a multi-unit, “mixed-use” property are not to be counted as “commercial units.” AOBA will continue to work with WSSC on developing procedures for the implementation of the regulation between now and the new effective date. The Commission amendments may be seen here.
WSSC Approves 8.5 % Rate Hike; County Councils Vote Next
State law requires that WSSC transmit its proposed FY2011 budget to the Counties by March 1 of each year. During a telephone conference on March 1, the WSSC Commissioners unanimously agreed to propose increasing rates by 8.5 percent.
Next, the Montgomery and Prince George’s County Councils and County Executives will review the proposed budget, including rate increases, and make recommendations. Both Counties must approve any amendments to the budget by June 1. Once the Counties' final actions have been received, the Commission will adopt an Approved Budget, which will then take effect on July 1.
Montgomery County - Eviction Delays
Because many members are experiencing severe delays in obtaining evictions at Montgomery County properties, AOBA contacted Sheriff Raymond M. Kight about our concerns. AOBA is now working with the Sheriff to try and identify ways to expedite the evictions and work toward eliminating the backlog. Due to the winter/holiday schedule, budget cuts, and the recent extraordinary weather events, the situation has been exacerbated, to the point where some evictions are being set 8-9 weeks out.
The Sheriff will immediately prioritize “walk-through” evictions. A “walk through” eviction is only available when the resident is no longer present and ALL property within the unit has been removed. Sheriff Kight’s written response to AOBA may be seen here.
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