For assessment purposes, property shall be divided into classes and subclasses. Real property is a class of property and is divided into the following subclasses: land that is actively devoted to farm or agricultural use, assessed under § 8-209 of this title; marshland, assessed under § 8-210 of this title; woodland, assessed under § 8-211 of this title; land of a country club or golf course, assessed under §§ 8-212 through 8-217 of this title; land that is used for a planned development, assessed under §§ 8-220 through 8-225 of this title; rezoned real property that is used for residential purposes, assessed under §§ 8-226 through 8-228 of this title; operating real property of a railroad; operating real property of a public utility; property valued under § 8-105(a)(3) of this subtitle; conservation property, assessed under § 8-209.1 of this title; and all other real property that is directed by this article to be assessed. Personal property is a class of property and is divided into the following subclasses: stock in business; distilled spirits; operating personal property of a railroad; operating personal property of a public utility that is machinery or equipment used to generate electricity or steam for sale; all other operating personal property of a public utility; machinery and equipment, other than operating personal property of a public utility, that is used to generate: electricity or steam for sale; or hot or chilled water for sale that is used to heat or cool a building; and all other personal property that is directed by this article to be assessed.

Except as provided in subsection (b) of this section, the value of real property shall be its value on the date of finality. The value of the land described in §§ 8-209 through 8-217 and 8-220 through 8-225 of this title shall be its use value on the date of finality as described in those sections.

In this section the following words have the meanings indicated. “New statewide value” means the phased in value of all real property subject to property tax on January 1 preceding any taxable year, excluding the phased in value of real property assessed for the 1st time during the calendar year beginning on that January 1. “Phased in value” means for the 1st, 2nd, or 3rd year of a 3-year cycle: the prior value of real property increased by one-third, two-thirds, or the full amount by which the value increased over the prior value based on a physical inspection of the real property; or if the value of real property has not increased, the value determined in the most recent valuation. “3-year cycle” means a continuous series of 3 calendar year periods beginning for each period with the 1st calendar year after the calendar year in which a physical inspection of real property is made under § 8-104(b) of this subtitle. On or before January 1 of each year, the Department shall determine the new statewide value. Except as provided in this subsection, the assessment of real property is its phased in value. The assessment of the real property described in § 8-102(b) of this subtitle is its phased in use value. The assessment of the operating real property described in § 8-108(c) of this subtitle is its value. The assessment of the operating real property described in § 8-109(c) of this subtitle is its value.

Real property shall be valued separately for: the land; and the improvements on the land. Notwithstanding a revaluation under subsection (c) of this section, the Department or supervisor shall value all real property once in every 3–year cycle based on a review of the real property under § 2–203 of this article. The date of finality for real property that is valued under this subsection is the January 1 immediately before the 1st taxable year to which the assessment based on the new value is applicable. In any year of a 3–year cycle, real property shall be revalued if any of the factors listed below causes a change in the value of the real property: the zoning classification is changed at the initiative of the owner or anyone having an interest in the property; a change in use or character occurs; substantially completed improvements are made which add at least $100,000 in value to the property; an error in calculation or measurement of the real property caused the value to be erroneous; a residential use assessment is terminated pursuant to § 8–226 of this title; or a subdivision occurs. For purposes of this subsection, “subdivision” means the division of real property into 2 or more parcels by subdivision plat, condominium plat, time–share, metes and bounds, or other means. When real property is revalued under this subsection, the Department or supervisor shall: determine the value that would have resulted if the revaluation had occurred for the 1st year of the 3–year cycle; determine the value that would have resulted if the revaluation had occurred for the 1st year of the preceding 3–year cycle; and adjust the phased–in value for each of the years remaining in the 3–year cycle to reflect the change that results from the revaluation. The Department or supervisor shall revalue real property under paragraph (1)(i), (ii), (iv), (v), and (vi) of this subsection on the semiannual date of finality. The revaluation shall be effective for the taxable year beginning on the semiannual date of finality, if the notice under this title is sent no later than 30 days after the semiannual date of finality. The Department or supervisor shall revalue real property under paragraph (1)(iii) of this subsection on the date of finality, semiannual date of finality, or quarterly date of finality following the substantial completion of the improvements to land. The local agency responsible for zoning shall provide the supervisor of assessments a list of each zoning classification change within 30 days of the approval of the change. The list shall identify any zoning classification change initiated or requested by the owner of the property or anyone having an interest in the property.

Except for land that is actively devoted to farm or agricultural use, the supervisor: may value income producing real property by using the capitalization of income method or any other appropriate method of valuing the real property; and shall consider an income method in valuing income producing commercial real property. For income producing single–family residential real property, the supervisor may value the property by using the same methods that are used for single–family residential real property that is owner–occupied. In determining the value of commercial real property developed under § 42 of the Internal Revenue Code, the supervisor: shall consider the impact of applicable rent restrictions, affordability requirements, or any other related restrictions required by § 42 of the Internal Revenue Code and any other federal, State, or local programs; may not consider income tax credits under § 42 of the Internal Revenue Code as income attributable to the real property; and may consider the replacement cost approach only if the value produced by the replacement cost approach is less than the value produced by the income approach for the property and it is reflective of the value of the real property. Within 30 days of closing and the execution and delivery of the regulatory agreement governing a low–income housing tax credit for commercial real property developed under § 42 of the Internal Revenue Code, the Department of Housing and Community Development shall notify the Department that a property has been awarded the low–income housing tax credit. The supervisor shall notify each owner of income producing real property to submit, under oath, on or before May 15 of each year, a current: income and expense statement for the real property, on the form that the Department requires; or annual income and expense statement in another form that is acceptable to the Department. For income producing real property that has a value in excess of $5,000,000 as listed on the assessment roll, the supervisor shall designate properties for which the owner must provide income and expense information or be subject to a penalty under subsection (e) of this section for failure to provide the information. For income producing real property that is designated under paragraph (2) of this subsection, the supervisor shall: include in the notice a statement that a penalty may be assessed under subsection (e) of this section if the owner of real property valued at over $5,000,000 fails to file the income and expense information required under this subsection; and send the notice to the owner as determined from the assessment rolls or the owner’s registered agent by: first–class certified mail; or e–mail, if within the past 3 years the recipient has provided to the Department an e–mail address and requested to receive the notices by e–mail. For income producing real property that has a value in excess of $5,000,000 as listed on the assessment roll that is designated under subsection (b)(2) of this section, if the income and expense statement required under subsection (b) of this section is not received by May 15, the Department shall notify the owner that the statement has not been received and that if the statement is still not received by June 15, the penalty specified in subsection (e) of this section will be assessed. The Department shall send the notice required under paragraph (1) of this subsection to the owner by: first–class certified mail; or e–mail, if within the past 3 years the recipient has provided to the Department an e–mail address and requested to receive the notices by e–mail. For property other than the property described in paragraph (1) of this subsection, upon request, an extension of up to 30 days may be granted by the supervisor for the filing required by subsection (b) of this section. The supervisor is not required to accept the expenses or depreciation claimed by the owner and may use other methods to determine these amounts. This subsection applies only to income producing real property that has a value in excess of $5,000,000 as listed on the assessment roll that is designated under subsection (b)(2) of this section. If an owner of income producing real property fails to submit income and expense information as required by subsection (b) of this section, by June 15, the supervisor shall assess on the owner of the real property a penalty of $100 per day up to a maximum equal to 0.1% of the value of the property listed on the assessment roll. The supervisor shall notify the collector of the county in which the property is located of assessment of a penalty. The collector shall collect the penalty imposed under this subsection and shall remit the penalty to the State Comptroller. The penalty imposed under this subsection may be waived by the supervisor for good cause. If the penalty imposed under this subsection is a direct “pass-through” to a lessee, the lessee shall have a right to recover that amount from the owner. When requested by the supervisor for valuation purposes, an officer or employee of any county or municipal corporation may provide to the supervisor the amount of income or any particulars disclosed in any tax return filed with the county or municipal corporation.

In this section, “cooperative housing corporation”, “cooperative interest”, “membership certificate”, and “proprietary lease” have the meanings provided under the Maryland Cooperative Housing Corporation Act. The value of a cooperative interest, a proprietary lease, a membership certificate, or similar items relating to an interest in a cooperative unit may be considered in determining the value of real property owned by a cooperative housing corporation or similar corporation.

Except as provided under § 8-110 of this subtitle, the value of personal property shall be its value on the date of finality. In valuing any personal property acquired by purchase, lease purchase, or other similar agreement for transfer of title to the personal property after a period of its use, the Department shall consider any sum that is paid to acquire the personal property.

The Department shall annually value the operating unit of a railroad on the basis of the value of the operating property of the railroad, by considering: the earning capacity of the operating unit; and all other factors relevant to a determination of the value of the operating unit. The Department shall allocate to this State the value of that part of the operating unit that is reasonably attributable to the part located in this State. The value allocated to this State shall be divided into an operating real property value and an operating personal property value, as determined by the Department. The assessment of operating real property is the value of operating real property less the assessment of operating real property, if any, that is exempt by law from property tax. The assessment of operating personal property is the value of operating personal property, less the assessment of operating personal property, if any, that is exempt by law from property tax. Operating land of a railroad is valued and assessed by the Department as part of the operating unit and is not valued and assessed by the supervisor. Returns, notices, and appeals of operating property assessments shall be administered pursuant to the sections of this article governing personal property assessment. If operating property is located permanently in more than 1 county or municipal corporation, the Department shall apportion the assessment of that operating property among the counties and municipal corporations where the operating property is located. If operating property is not located permanently in a county or a municipal corporation, the Department shall apportion the assessment of that operating property among the counties and municipal corporations on the basis of the ratio of the all track mileage, excluding trackage rights, of the railroad operated in each county and any municipal corporation, to the total of all track mileage, excluding trackage rights, operated in this State. The Department may adopt regulations to carry out the provisions of this section.

The Department shall annually value the operating unit of a public utility on the basis of the value of the operating property of the public utility, by considering: the earning capacity of the operating unit; and all other factors relevant to a determination of value of the operating unit. The Department shall allocate to this State the value of that part of the operating unit that is reasonably attributable to the part located in this State. From the value allocated to this State under subsection (b) of this section, the Department shall deduct: the fair average value of fuel that represents the percentage reduction or exemption authorized by §§ 7–108, 7–222, and 7–226 of this article; and the assessment of operating property, if any, that is exempt by law from property tax. The value remaining after making the deductions shall be divided into an operating real property value and an operating personal property value, as determined by the Department. The value of operating real property is the assessment of operating real property of a public utility. The value of operating personal property is the assessment of operating personal property of a public utility. Operating land of a public utility is valued and assessed by the Department as part of the operating unit and is not valued and assessed by the supervisor. The provisions of this subsection are not intended to alter the law as codified in former Article 81 of the Code that was in effect as of January 31, 1986. Returns, notices, and appeals of operating property assessments shall be administered pursuant to the sections of this article governing personal property assessments. For operating property of a public utility, the Department shall apportion the assessment of that operating property among the counties and municipal corporations where the operating property is located. In determining whether to classify a company as a public utility, the Department shall consider and evaluate whether the company: is subject to the authority of a regulatory body of the State or the federal government, such as the Maryland Public Service Commission, the Federal Communications Commission, or the Federal Energy Regulatory Commission; uses a significant portion of the real and personal property used in its business operations as an integrated whole or unit; provides a basic service to the public; and owns or uses assets that are most appropriately appraised using the unit valuation method. Notwithstanding a company’s failure to meet all of the criteria under paragraph (1) of this subsection, the Department may classify the company as a public utility if the Department determines that the company predominantly meets the criteria. The Department may adopt regulations to carry out the provisions of this section.

In this section the following words have the meanings indicated. “Fair average value” means the average of the fair value of stock in business for the number of months of a year in which the stock in business was in existence. “Fair value” means the lesser of the cost or the value of stock in business. “Stock in business”: means the inventory of a commercial or manufacturing business that is engaged in business in this State; and does not include a used motor vehicle of a registered motor vehicle dealer if that vehicle is: titled in this State; and acquired by a dealer as partial payment of the purchase price of another motor vehicle. Stock in business shall be valued to the owner of the stock in business at its fair average value on the date of finality.

In this section the following words have the meanings indicated. “Distiller” includes: the owner or proprietor of a bonded or other warehouse where distilled spirits are stored; or a person who has custody of distilled spirits. “Fair value” means the lesser of: the cost, not reduced by any allowance for inflation; or market value, not reduced by any allowance for inflation. If a county subjects distilled spirits to the personal property tax, on or before March 15 of each year, a distiller shall submit to the Department a report of the fair value of distilled spirits held by the distiller in the county. Distilled spirits shall be valued at the fair value of the spirits on January 1 of the year in which the report is made. The value of the same distilled spirits may not be reported more than 1 time in any period of 12 months. The distiller shall pay the property tax on the distilled spirits held by the distiller.

Interests subject to property tax under § 6-102 of this article shall be valued as if the lessee, person in possession, or user of the property were the owner of the property.

In this section, “hoophouses” means temporary structures placed on land that are made of plastic attached to hoop–like supports and used for agricultural purposes. A hoophouse shall be valued as personal property unless: the supports for the hoophouse are affixed to the land with cement or similar material; or the hoophouse is placed on a cement or other foundation.