2021 Legislative Update

2021 Legislative Update

The 2021 Legislative Session of the Maryland General Assembly was a unique session due to the ongoing impact of the COVID-19 pandemic. Despite the challenges, the 90-day session concluded in early April with over 2,300 bills introduced, of which 817 passed. To follow is a brief synopsis of the new laws that may impact you, your business, or your community.

Business Regulation

Corporate Diversity (HB 1210)

This law will go into effect on July 1, 2022 and will require certain entities that do business in the State to demonstrate diversity on their board or to demonstrate support for “underrepresented communities” before qualifying for a “State benefit” (grant, contract or tax credits) of $1.0 million or more within a single fiscal year.

Under the new bill, the Department of Commerce and the Governor’s Office of Small, Minority, and Women Business Affairs are required to develop and maintain a State equity report to assess diversity data for each entity related to underrepresented communities and adopt regulations to carry out the requirements of the bill, including directives for State agencies and entities to comply with those requirements.

This bill’s requirements do not apply to sole proprietors; limited liability companies that are owned by a single member; privately held companies where at least 75% of the shareholders are family members; or entities with a budget that is less than $5.0 million and that do not qualify for state benefits.

Employment Law

Maryland Essential Workers Protection Act (HB 581)

This emergency bill went into effect earlier this year, this bill establishes various safety protections and benefits for “essential workers” and various requirements for “essential employers” when the Governor proclaims a catastrophic health emergency due to a communicable disease.

This new bill requires essential employers to:

  • Provide working conditions that comply with state and local safety standards;
  • provide no-cost “safety equipment” (not necessarily PPE) to essential workers;
  • pay for testing for the communicable disease that is the subject of the catastrophic health emergency, if not covered by the essential worker’s insurance and notify other employees who may have been exposed to a said communicable disease and MDH of an essential worker’s positive test;
  • if the federal government or State provides funding for such, provide paid “public health emergency leave” of 112 hours for full-time (40 hours/per week), non-teleworking, essential workers or an amount of hours equivalent to the average of a typical four week period of a part time essential worker; and
  • limit public health emergency leave to use for the following purposes:
    • to isolate without an order to do so because the essential worker has been diagnosed with the communicable disease that is the subject of the emergency or is experiencing associated symptoms; or
    • to care for a family member who is isolating.

Bereavement Leave (SB 473/HB 56)

Beginning October 1, 2021, employees at companies with at least 15 employees may use any paid leave for bereavement leave for the death of an immediate family member. This new bill expands Maryland’s Flexible Leave Act which applies to employers with 15 or more employees in each of 20 or more calendar weeks in the current or preceding calendar year, and authorizes employees to use any earned paid leave (sick leave, vacation, PTO) for an illness in the employee’s immediate family (child, spouse or parent).

Prevailing Wage (SB 35/HB 37)

Beginning October 1, 2021, this new bill requires that a public work contract valued at $250,000 or more that receives 25% or more in State funding pay the State prevailing wage to employees working on the project.

Peace Order/Workplace Violence (HB 289)

An employer can file a petition for a peace order on behalf of an employee based on specific acts or threatened violence against that employee in the employer’s workplace.  The peace order would provide the employee with certain protections from the assailant contacting, attempting to contact or harassing the employee while at work or from entering the home, school, place of employment or temporary residence of the employee.

An employer must notify the employee before seeking such a peace order. The bill provides that an employer will not be liable for failing to file for a peace order, although this provision will sunset after two years. The bill also protects the employee from retaliation by the employer for refusing to provide information or testify in support of the petition.

Estate Planning

Maryland SAFE Act (Statute Against Financial Exploitation) (SB 327)

The goal of the Maryland SAFE Act is to give victims the opportunity to recoup any property taken from them by wrongful acts of perpetrators.  This bill passed both houses in the General Assembly in its first year of introduction and was signed into law by Governor Larry Hogan.  This provisions of the Maryland SAFE Act apply to actions of a perpetrator on or after October 1 of this year.

The Maryland SAFE Act creates a civil cause of action for financial exploitation that is clearly set forth in the statute. The Act then provides remedies, including allowing the victim to be awarded treble damages, attorney’s fees, and equitable relief, in addition to recovering the value of the loss. Maryland law currently provides no such civil remedies for financial exploitation; rather, a victim of such abuse must rely on the criminal statutes, with its heavy burden of proof, or on actions taken by government agencies on their behalf, to get back only the property that was stolen, if that is even possible. As a civil cause of action with enhanced remedies, the Maryland SAFE Act will provide a path for victims to recover the full value of their property, with an easier burden of proof, and without involving law enforcement officials.

Gaming

Gaming - Regulation of Fantasy Gaming Competitions and Implementation of Sports Wagering (HB 940)

Passed as an emergency bill which became effective upon enactment on May 18, 2021, this legislation formally establishes sports gaming in Maryland following the approval of Question 2 (the Sports Betting Expansion Measure) by over 2/3 of Maryland voters.  The bill does the following:

  1. creates a limited number of retail sports gaming licenses for designated Class A (including the State’s six casinos, professional sports stadiums, and large racetracks) and qualifying Class B licensees;
  2. creates a limited number of mobile sports gaming licenses for qualifying licensees, as determined by the Sports Wagering Application Review Commission;
  3. mandates specific reporting requirements relating to a partnership with minority and women-owned businesses as part of the application for, and issuance of, sports gaming licenses;
  4. creates and allocates special funding for minority and women-owned businesses seeking to participate in Maryland’s sports gaming industry and for HBCUs; and
  5. implements a general licensure, regulatory, and tax regime for all aspects of the State’s sports gaming industry.

Video Lottery Terminals - Proceed Distribution (HB 532)

Effective October 1, 2021, this bill aims to adjust the proceed distribution rates for revenues from the various video lottery terminal (VLT) licensees in the State.  As passed, the bill will:

  1. decrease the mandated payout percentages for individual VLTs and the total gaming floor;
  2. increase the overall distribution rate for the VLT licensees in Allegany and Cecil Counties and Baltimore City;
  3. transfer the liability for the “hold harmless” requirements for local impact grants in Anne Arundel County from Prince George’s County to the State Lottery Fund; and
  4. repeal a prohibition that the Worcester County licensee have a hotel on its premises.

This legislation may serve as the first step in a comprehensive restructuring of the State’s gaming tax regime for VLTs, table games, and other types of gaming.

Real Estate

Many of the real estate-related bills passed by the legislature in 2021 focused on providing additional protections for tenants in response to the pandemic.

Commercial Tenants – Suspension of Personal Liability Clauses (HB 719)

The legislature extended some pandemic-related relief to guarantors of commercial leases, as well as residential tenants.  This emergency bill provides that a personal liability clause in a commercial lease is unenforceable if the following conditions are met: (1) as a result of the Governor’s declarations issued March 5, 2020, or other proclamations issued related to the COVID-19 outbreak, the tenant was required to either cease serving food or beverages for on-premises consumption or close to the public because of its status as a nonessential business or a specific provision contained in an executive order or proclamation; and (2) the default causing the individual to become wholly or partially personally liable occurred between March 23, 2020, and September 30, 2020, inclusive. The state of emergency ended on July 1, so after January 1, 2022, a landlord may again enforce personal liability clauses in commercial leases.

Residential Tenants – Right to Counsel (HB 18/SB 154)

With this bill, Maryland became the first state in the nation to pass statewide access to counsel legislation for tenants facing eviction.  The bill provides low-income residential tenants with access to legal representation in eviction proceedings.  An Access to Counsel in Evictions Program administered by the Maryland Legal Services Corporation will provide legal representation in covered proceedings as soon as possible after (1) a landlord provides notice to terminate a tenancy, (2) the initiation of an eviction proceeding, or (3) the determination by a designated organization that a proceeding related to a constructive eviction should be initiated.  The program will be phased in over time with the goal of full implementation by October 1, 2025.  In addition, landlords are now required to provide ten (10) days’ written notice to tenants prior to filing a complaint in the District Court in failure to pay rent cases. 

Nonrenewal of Lease - Notice Requirements (HB 104/SB 401)

This bill extends the amount of written notice that a landlord must give a tenant prior to the expiration of a residential lease from 30 days to 60 days if the landlord chooses not to renew the lease if the lease was for less than a year.  The bill has statewide application and applies to (1) any residential lease that is executed on or after the bill’s October 1, 2021 effective date, and (2) residential leases that were executed prior to October 1, 2021, that have expired and resulted in a tenancy created under specified provisions of § 8-402 of the Real Property Article, on or after the bill’s effective date.  The notice periods have not changed for leases of one year or more.  The bill also repeals statutory requirements specific to Baltimore City and Montgomery County.

Water Supply – Private Well Safety Program (HB 1069)

Effective as of July 1 of this year, the owner of residential rental property served by a private water supply well must provide for water quality testing every three years and disclose the results to current and prospective tenants. If a water quality test reveals that a private water supply well is contaminated, the landlord must (1) notify the Maryland Department of the Environment (MDE) and the local health department (LHD) about the contamination; (2) provide an approved potable water supply until the contamination is permanently remediated; and (3) resolve the issue within 60 days of learning of the contamination. The landlord may resolve the issue by (1) providing an approved potable water supply on an ongoing basis; (2) permanently remediating the contamination; or (3) providing the tenant with the option to terminate the lease. Violations of the bill’s provisions may subject the landlord to a fine of up to $1,000.

Reusable Tenant Screening Reports (HB 861/SB 691)

Landlords may now allow tenants to use “reusable” tenant screening reports if the landlord so chooses. A “reusable tenant screening report” is a report prepared within the previous 30 days by a consumer reporting agency at the request and expense of a prospective tenant and made directly available to a prospective landlord at no charge for use in the rental application process.  Landlords must notify prospective tenants regarding whether or not the landlord accepts reusable tenant screening reports either in writing or by posting notice in a conspicuous manner; if the landlord does accept reusable tenant screening reports, the landlord may not charge a rental application fee.

Tax Sales – Redemption (SB 0325)

The amount which a person is required to pay the tax collector to redeem property sold at tax sale has been altered to provide that only delinquent taxes accruing after the date of the tax sale be paid, instead of any taxes accruing after the date of the tax sale.

Community Associations

During the 2021 session, the Maryland General Assembly passed the following bills impacting Maryland cooperatives, condominiums and homeowner associations.  Except as otherwise noted, these new laws will became effective on October 1, 2021.

Montgomery County - Cooperative Housing Corporations, Condominiums and Homeowners Associations - Reserve Studies (HB 567)

Last year, the Prince George’s County Delegation introduced legislation requiring cooperatives, condominiums and homeowner associations to perform reserve studies and requiring the annual budget include funds equal to at least 80% of the funding amount recommended in the most reserve study.  This year, the Montgomery County Delegation introduced HB567, requiring cooperatives, condominiums and homeowner associations located in Montgomery County to have an independent reserve study completed at least thirty days before (i) the first meeting of the cooperative at which the members other than the owner have a majority vote in the cooperative or (ii) the meeting of the Council of Unit Owners to elect a board of directors.  For homeowner associations in Montgomery County established after October 1 2021, the reserve study must be completed at least 30 days, but not more than 90 days, prior to the first meeting at which the association elects a board of directors.  Cooperative, condominiums and homeowners associations established before October 1, 2021 must have a reserve study performed by October 1, 2022, unless a reserve study was conducted within the past 5 years.  Reserve studies must be updated every 5 years.  The legislation also requires the governing body to review the most recent reserve study annually for accuracy and to fund reserves in accordance with the most recent reserve study.  Assessments can be increased to cover the reserve funding amount notwithstanding any provision in a condominium or homeowner’s association articles of incorporation, bylaws or declaration or any provision in a cooperative’s articles of incorporation, bylaws or proprietary lease. 

Delegate Holmes introduced HB313, which would have imposed similar reserve requirements statewide.  However, the statewide bill failed to pass.

Condominiums and Homeowners Associations - Meeting Requirements (HB 593/SB 535)

This bill establishes procedures by which a condominium and a homeowners association may call an additional meeting of the council of unit owners or the members of the homeowners association if the numbers present in person or by proxy at the original meeting is insufficient to constitute a quorum.  For condominiums, the bill clarifies the current law and made some technical changes.  Specifically, the notice of the initial meeting must contain the date, time and place of the additional meeting, provide that an additional meeting must occur no less than 15 days after the initial meeting, the notice of the additional meeting must be provided no less than 10 days before the additional meeting and requires delivery of notice of the additional meeting by advertising in a newspaper published in the county where the condominium is located, or if the condominium has a website, by posting on the homepage or the website. Homeowner associations may no longer rely on the provisions of the Maryland Non-Stock Corporation Code for calling an additional meeting, but must comply with the procedures added to the Homeowners Association Act.  The requirements for calling the additional meeting of a homeowners association are the same as calling an additional meeting of a condominium. Of note is that in addition to either advertising the additional meeting in a newspaper published in the county where the association is located or posting it on the homepage of the association’s website, the notice must also be delivered, mailed or sent via electronic transmission to each lot owner not less than 10 days before the additional meeting.

Real Property - Condominiums, Homeowners Associations and Cooperative Housing Corporations - Virtual Meetings (HB 1023/SB 686)

At the request of the Maryland Legislative Action Committee, Delegate Holmes introduced HB1023 and Senator Smith introduced SB686 which authorize the governing body of a cooperative, condominium or homeowners association to hold any meeting of the board, a committee or the entity to conduct meetings by electronic means.  A link or instructions on how to access the meeting must be included with the notice of the meeting.  No specific authorization from the members is required in order to hold a meeting electronically.  Anyone attending the meeting remotely is deemed present for quorum and voting purposes.  If a vote is required by the members of the cooperative, condominium or homeowners association, then the board may deliver a ballot along with the notice of the meeting.  Only those members present during the electronic meeting shall be authorized to vote by ballot.  Members who are not present may vote by proxy and shall be considered present for quorum purposes.  The board may set a reasonable deadline for returning the ballots which shall not be later than 24 hours after the close of the meeting. Nominations from the floor at the meeting are not required if at least one candidate has been nominated to fill each open board position.  This law became effective on June 1, 2021.

Real Property - Impermissible Restrictions on Use - Portable Basketball Apparatuses (HB 1347)

At the request of the Speaker of the House, Delegate Barve introduced HB1347, which prohibits specified restrictions on the use of or imposing unreasonable limitations on the location and use of a portable basketball apparatus on property that the owner owns or has the right to the exclusive use of the area in which the placement and use of the portable basketball apparatus is to occur.  An unreasonable limitation includes a limitation which increases the cost of using a portable basketball apparatus or significantly decreases the ability to use a portable basketball apparatus as designed and intended.  A “portable basketball apparatus” is defined as a portable apparatus or devise designed for recreational use in conjunction with the game of basketball.

Electric Vehicle Recharging Equipment for Multifamily Units Act (HB 110/SB 144)

Condominiums and homeowner associations may not impose unreasonable restrictions on the installation or use of electric vehicle recharging equipment in an owner’s deeded parking space or a parking space designated for use by a particular owner. If approval is required for the installation or use of electric vehicle recharging equipment, the board must process and review an application in the same manner as applications for architectural modifications.  If an application is not denied within 60 days of receipt, it is deemed approved. The board must approve the installation of electric vehicle recharging equipment if the installation does not impede the normal use of an area outside the owner’s parking space and is reasonably possible.  The owner must agree to comply with all relevant building codes, safety standards and the association’s architectural standards.  The owner must also agree to engage a licensed contractor to install the equipment and pay for the electricity usage. If an owner decides to remove the electric vehicle charging equipment the owner must pay the cost of its removal and restoring the common area. 

Condominiums and Homeowners Associations - Rights and Restrictions-Composting (HB 248)

Condominiums and homeowner associations may not prohibit or unreasonably restrict an owner from contracting with a private entity to collect organic waste materials from the owner for composting or unreasonably impede the ability of a private entity to access the common areas for the purpose of collecting organic waste materials from a unit owner for compost. In addition, homeowner associations may not prohibit or unreasonably restrict owners from composting waste materials for the owner’s personal or household use, provided the owner owns or has the right to exclusive use of the area where the composting is conducted and observes all laws, ordinances and regulations of the state and local jurisdiction pertaining to composting. 

Real Property - Restrictions on Use - Low-Impacting Landscaping (HB 322)

Low impact landscaping means landscaping techniques that conserve water, lower maintenance costs, provide pollution prevention and create habitat wildlife.  A covenant in a deed, declaration or bylaws may not impose or act to impose unreasonable limitations on low impact landscaping provided that the property owner owns or has the right to exclusive use of the property and maintains or regularly tends to the low-impact landscaping.  An unreasonable limitation includes limitations that significantly increases the cost of low impact landscaping, decreases the efficiency of low income landscaping or requires cultivated vegetation to consist in whole or in part of turf grass. Associations may include reasonable design and aesthetic guidelines regarding the type, number and location of low impact landscaping features.

Family Law

Child Support – Guidelines (HB 946)

This bill adjusts the child support guidelines based on updated economic data, establishes a presumptively correct child support obligation for cases in which the combined monthly income is less than $1,250, extends the existing child support guidelines to provide presumptively correct child support amounts in cases involving combined monthly income up to $30,000, codifies the concepts of voluntary impoverishment and potential income and authorizes the court to decline to establish a child support order under certain circumstances. This bill took effect October 1, 2021, but the implementation will be delayed until July 1, 2022.

Family Law – Mandatory Reporter Training (HB 9)

This bill will require the Department of Human Services to post on its website a free online course on the identification, prevention and reporting of child abuse.

Family Law – Investigation of Suspected Child Abuse and Neglect – Preliminary Report to State’s Attorney (SB 267)

This bill repeals the requirement in §5-706, Family Law Article, that a local department of social services or law enforcement agency must report preliminary findings of an investigation of suspected child abuse or neglect to the local State’s Attorney within ten (10) days after receiving notice of the suspected abuse or neglect.

Health Care

During the 2021 Legislative Session, eight new bills were passed into law and seventeen others were considered but not enacted. The following is a summary of the new laws that were enacted on June 1, July 1 or became law on October 1, 2021.

Preserve Telehealth Access Act 2021 (SB 3/HB 123)

This law expands the definition of “telehealth” and the coverage and reimbursement requirements for health care services provided through telehealth for both Medicaid and private insurance. Insurers, nonprofit health services plans and health maintenance organizations (collectively known as carriers) must reimburse for a covered service appropriately provided through telehealth, as specified. The bill requires coverage of telehealth regardless of the patient’s location at the time services are provided and also expands coverage to include audio-only telephone conversation until June 30, 2023. For a two-year period and with certain limitations, reimbursement must be provided for a health care service appropriately provided through telehealth on the same basis and at the same rate as in-person delivery of the health care service.

By December 1, 2022, the Maryland Health Care Commission must submit a report on the impact of providing healthcare services in accordance with the bill’s requirements. This bill took effect July 1, 2021; the bill’s insurance provisions apply to all policies, contracts and health benefit plans issued, delivered, or renewed in the State on or after that date.

Income Tax – Credits for Preceptors in Areas With Health Care Workforce Shortages (SB 102/HB 1252)

This bill, effective June 1, 2021, establishes a physician assistant (PA) preceptor income tax credit. The tax credit will be funded by a $15 fee added to a PA licensure renewal to be paid to the Physician Assistant Preceptorship Tax Credit Fund to offset the costs of the PA preceptor tax credit. The bill also repeals the termination dates of the licensed physician and nurse practitioner preceptor income tax credits.

Department of Information Technology – Study of a Common Information Technology Platform for Health Occupation Boards (SB 262/HB 224)

This law establishes a study by the Department of Information Technology to review the feasibility and cost of developing a common information technology platform for use by each health occupation board, as well as a standardized website appearance and functionality for all boards. This law requires the Department of Information Technology to consult with each health occupation board and report the findings of its study and make recommendations to the legislature on or before December 1, 2021.

Health Occupations – Pharmacists – Administration of Children’s Vaccines – Study and Temporary Authority (SB 736/HB 1040)

Effective July 1, 2021, this law provides temporary authorization for pharmacists to administer vaccinations to children between the ages of 3 and 18 years old, provided the pharmacist complies with training and record-keeping requirements. The temporary authorization expires on June 30, 2023. Also, this legislation establishes a study to assist the legislature in establishing policy for authorizing pharmacists to administer vaccines to children.

Public Information Act – Revisions (Equitable Access to Records Act) (HB 183)

This law, which is not effective until July 1, 2022, requires all governmental units to adopt a policy of proactive disclosures for public records that are available for inspection under the Public Information Act. It also expands the powers of the Public Information Act Compliance Board in investigating complaints of violations of the Public Information Act Compliance and enforcing compliance.