As the General Assembly enters the last week of its 2025 Session, bills related to commercial real estate taxes, fees, and building energy codes remain unresolved.
The House of Delegates has passed House Bill 49, the Maryland Department of the Environment’s request for authority to set enforceable electricity use limits on large commercial and multifamily buildings. The bill allows the Department to impose a noncompliance fee, equivalent to a doubling of the standard electricity rate, on electricity use above limits set in the Building Energy Performance Standards. The bill is in the Senate, where the electricity use penalty does not enjoy the same level of support that it found in the House of Delegates.
House Bill 23 and Senate Bill 472 both authorize counties and Baltimore City to set property tax rates on commercial property that are higher than other building types. This breaks with the long-standing principle that property tax rates are uniform, regardless of property type. House Bill 23 is a favorite of the Maryland Association of Counties as well as Montgomery and Frederick counties, who argue it is a necessary tool to pay for unfunded education and transportation mandates handed down from the state.
A fee buried in the state budget could impact the commercial real estate industry. The proposed budget for the Maryland State Archives would be almost entirely funded by a new $0.20 fee to view or download real estate-related records and documents. The Archives estimates the fee will cost users $1 million a month.
House Bill 973, nicknamed The Better Buildings Act, remakes the state building and energy codes to match the vision of the Chesapeake Climate Action Network and the Rocky Mountain Institute. The bill was scaled back by the House Environment and Transportation Committee to ban the use of fossil fuels in the new construction of commercial and multifamily buildings 35,000 square feet and larger. The revised bill was pulled from a committee vote last week but is still the subject of a pressure campaign from environmental and climate nonprofits.
With the Maryland General Assembly set to adjourn Sine Die on April 7, hundreds of bills are on the move, with energy and taxes the most impactful. As always, the NAIOP MD Legislative Committee remains engaged on these and other issues on behalf of commercial real estate.