SPIRO T. AGNEW, Governor                          927

Section 1. Be it enacted by the General Assembly of Maryland,
That subsections (f) and (g) of Section 277 of Article 81 of the
Annotated Code of Maryland (1965 Replacement Volume), title
"Revenue and Taxes," subtitle "Recordation Tax," be and they are
hereby repealed and re-enacted, with amendments, to read as follows:

277.

(f)    Lease creating ground rent. In the case of a lease creating a
perpetually renewable ground rent, the tax shall be based upon the
capitalization at 6% of the annual ground rent, plus the actual con-
sideration, other than the ground rent, paid or to be paid, unless
the same is executed and recorded simultaneously with a bona fide
conveyance for full consideration of the reversionary estate thereby
created, in which event such lease shall not be taxed.

(g)    Lease for term of years.

(1)    Of an interest real estate or chattels real. In the case of a
lease for a term of years, not perpetually renewable, the tax shall
be based upon the capitalization at 10% of the average annual rental
over the entire term of the lease, including any renewable term,
plus the actual consideration, other than rent, paid or to be paid.
[Where the average annual rental cannot be determined the tax
shall be based upon the assessed value of the property covered by
the lease.] Where the average annual rental cannot be determined,
the tax shall be based upon either (i) the minimum average annual
rental ascertainable from the terms of the lease plus 5% thereof, the
whole to be capitalized at 10%, plus the actual consideration, other
than rent, paid or to be paid, or (ii) the assessed value of the prop-
erty covered by the lease multiplied by one and one-half, whichever
is the greater. The provisions of this section shall not apply to leases
of personal property.

(2)    Instruments substituting for lease. No attornment agree-
ment, memorandum of lease, assignment of lease or other instru-
ment (referred to collectively herein as "other instrument") in-
tended, to publicize or giving or intended to give constructive notice
of the existence of a lease which has not been recorded but which,
if recorded, would be taxable hereunder, whether or not such other
instrument gives such constructive notice in point of law, shall be
received for recording until the original lease shall have been ex-
hibited to the clerk and the tax paid thereon, in addition to what-
ever tax may be payable on such other instrument.

The tax on any such lease shall be chargeable to the lessee thereof
and, in the event it shall be required to be advanced by the party
offering for record such other instrument due to the failure or re-
fusal of such lessee to pay the amount due to the clerk on demand
by such party, then the amount thereof, plus interest from the date
of payment, shall be recoverable by such party from the lessee by
action at law.

Nothing in this subsection (2) shall be taken to apply to any
lease not required by law to be recorded.

Sec. 2. And be it further enacted, That this Act shall take effect
July 1, 1968.

Approved May 7, 1968.