WILLIAM DONALD SCHAEFER, Governor                         Ch. 377

(f) Articles of consolidation or other document which evidences a
consolidation of foreign corporations.

(3) "Instrument of writing" does not include:

(a)     A mortgage, deed of trust, or other contract that creates an
encumbrance on real property; or

(b)     A security agreement, as defined in § 12-101(e) of the Tax -
Property Article of the Annotated Code of Maryland.

B.      The County Commissioners may impose a transfer tax on an instrument of
writing:

(1)     Recorded with the Clerk of the Circuit Court for St. Mary's County; or

(2)     Filed with the State Department of Assessments and Taxation.

C.      A transfer tax under this section:

(1)     Shall be established by ordinance;

(2)     May not exceed 1%; and

(3)     Does not apply to:

(a)     An instrument of writing exempt from the State transfer tax under
§ 13-207 of the Tax - Property Article of the Annotated Code of Maryland; or

(b)     A transfer of land subject to the agricultural land transfer tax
under Title 13, Subtitle 3 of the Tax - Property Article of the Annotated Code of
Maryland.

D.      (1) The proceeds from the transfer tax may only be used to pay for capital
projects.

(2) The County Commissioners shall state in the county budget each year:

(a)     An estimate of the revenue to be received from the transfer tax for
both the current and the ensuing fiscal years;

(b)     The revenue received from the transfer tax during the previous
fiscal year; and

(c)     The capital projects for which the County Commissioners
anticipate the proceeds from the transfer tax will be used.

E.      Before the county imposes a transfer tax under this section, the County
Commissioners shall hold a public hearing that:

(1)     Shall be advertised by publication in a newspaper of general circulation
in the county at least 10 days before the hearing; and

(2)     May not be part of the annual budget hearing.

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