LAWRENCE J. HOGAN, JR., Governor Ch. 574
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Chapter 574
(Senate Bill 830)
AN ACT concerning
Natural Resources – Oysters – Spat, Shells, and Substrate
FOR the purpose of establishing various programs, goals, research requirements, planning
requirements, and funding requirements related to oyster spat, oyster shells, and
oyster substrate; requiring the Maryland Agricultural and Resource–Based Industry
Development Corporation to provide loans and grants up to a certain amount to
finance the eligible costs of certain eligible seafood processing projects; replacing the
oyster shell recycling tax credit with an annual grant program administered by the
Department of Natural Resources; requiring the Maryland Geological Survey, in
conjunction with certain other entities, to conduct certain bottom surveys; requiring
the University of Maryland Center for Environmental Science to conduct research
evaluations related to substrate in collaboration with certain entities; requiring the
Department to develop a certain substrate plan; providing for the construction and
expansion of certain oyster hatcheries; providing for oyster replenishment and
restoration in Eastern Bay; and generally relating to oysters.
BY repealing
Article – Tax – General
Section 10–724.1
Annotated Code of Maryland
(2016 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, without amendments,
Article – Economic Development
Section 10–501(a), (f), and (l)
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
BY adding to
Article – Economic Development
Section 10–519.1
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
BY repealing
Article – Natural Resources
Section 4–1019.1
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement
BY adding to Ch. 574 2022 LAWS OF MARYLAND
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Article – Natural Resources
Section 4–1019.1 and 4–1019.2(g)
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, with amendments,
Article – Natural Resources
Section 4–1102
Annotated Code of Maryland
(2018 Replacement Volume and 2021 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Tax – General
[10–724.1.
(a) (1) Subject to the limitations of this section, an individual or a corporation
may claim a credit against the State income tax in an amount equal to $5 for each bushel
of oyster shells recycled during the taxable year.
(2) An individual or a corporation that claims the credit under this section
shall provide verification of the amount of oyster shells recycled during the taxable year
with the individual or corporation tax return.
(b) (1) For any taxable year, the credit allowed under this section may not
exceed the lesser of:
(i) $1,500; or
(ii) the State income tax calculated before application of the credit
allowed under this section and §§ 10–701 and 10–701.1 of this subtitle.
(2) The unused amount of the credit may not be carried over to any other
taxable year.
(c) (1) The Department of Natural Resources and the Comptroller jointly shall
adopt regulations to carry out the provisions of this section.
(2) The regulations shall establish eligibility criteria and provide for the
certification of businesses, landfills, and nonprofit organizations to verify the amount of
oyster shells recycled by each individual or corporation.]
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws o f Maryland read
as follows: LAWRENCE J. HOGAN, JR., Governor Ch. 574
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Article – Economic Development
10–501.
(a) In this subtitle the following words have the meanings indicated.
(f) “Corporation” means the Maryland Agricultural and Resource –Based
Industry Development Corporation.
(l) (1) “Project” means any property, the acquisition or improvement of which
the Board, in its sole discretion, determines by resolution will accomplish at least one of the
purposes listed in § 10–502 of this subtitle, whether or not the property, or any interest in
the property:
(i) is or will be used or operated for profit or not for profit;
(ii) is or will be located on one or more sites; or
(iii) may be financed by bonds, the interest on which is exempt from
taxation under federal law.
(2) “Project” includes:
(i) property and rights related to the property, appurtenances,
rights–of–way, franchises, easements, and other interests in property;
(ii) structures, equipment, furnishings, rail or motor vehicles,
barges, and boats;
(iii) property that is functionally related and subordinate to a project;
and
(iv) patents, licenses, and other rights necessary or useful in the
improvement or operation of a project.
10–519.1.
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS
INDICATED.
(2) “ELIGIBLE SEAFOOD PROC ESSING PROJECT ” MEANS A PROJECT
TO ESTABLISH OR EXPAND THE BUSINE SS OF A LICENSED SEA FOOD DEALER THAT:
Ch. 574 2022 LAWS OF MARYLAND
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(I) SUPPORTS THE GOAL OF INCREASING THE AM OUNT OF
OYSTER SHELL S RETAINED IN THE STATE AND RETURNED TO THE CHESAPEAKE
BAY; AND
(II) MEETS THE CRITERIA E STABLISHED BY THE CORPORATION
UNDER THIS SECTION .
(3) “LICENSED SEAFOOD DEAL ER” MEANS A PERSON LICEN SED
UNDER § 4–701 OF THE NATURAL RESOURCES ARTICLE TO BUY, PROCESS, PACK,
RESELL, MARKET OR OTHERWISE DEAL IN FISH CAUGHT IN THE TIDAL WATERS OF
THE STATE.
(4) “REPLETION” MEANS ENHANCING AREA S WHERE COMMERCIAL
HARVEST IS PERMITTED .
(B) (1) THE CORPORATION SHALL PRO VIDE LOANS AND GRANTS UP TO
$250,000 TO FINANCE THE COSTS OF ELIGIBLE SEAFOOD PRO CESSING PROJECTS IN
ACCORDANCE WITH THIS SECTION, INCLUDING HISTORIC O YSTER SHUCKING
FACILITIES, NOT TO EXCEED $25,000 FOR EACH FULL –TIME JOB THAT IS
PROJECTED TO BE CREA TED OR RETAINED .
(2) FINANCING PROVIDED UN DER THIS SECTIO N SHALL BE
CONDITIONED ON THE A GREEMENT BY THE RECI PIENT TO RETURN, AT NO COST TO
THE STATE, ALL OYSTER SHELLS PROCESSED BY THE REC IPIENT:
(I) TO THE DEPARTMENT OF NATURAL RESOURCES, FOR USE
IN THE DEPARTMENT ’S REPLETION AND RESTOR ATION ACTIVITIES; OR
(II) DIRECTLY TO OYSTER BA RS IN THE PUBLIC FIS HERY OR
RESTORATION AREAS , IN ACCORDANCE WITH R EGULATIONS OF THE DEPARTMENT
OF NATURAL RESOURCES COMPLY WITH THE PROV ISIONS OF § 4–1019.2 OF THE
NATURAL RESOURCES ARTICLE UNTIL THE LOA N IS REPAID.
(3) THE CORPORATION SHALL FOR GIVE $35 OF ANY LOAN PROVIDED
UNDER THIS SECTION AS FOLLOWS:
(I) THE CURRENT MARKET V ALUE AS ESTABLISHED IN §
4–1019.2 OF THE NATURAL RESOURCES ARTICLE FOR EACH BUSHEL OF O YSTER
SHELLS THAT THE LOAN RECIPI ENT RETURNS TO THE DEPARTMENT OF NATURAL
RESOURCES AT NO COST; OR DIRECTLY TO OYSTER B ARS IN ACCORDANCE WITH
PARAGRAPH (2) OF THIS SUBSECTION
LAWRENCE J. HOGAN, JR., Governor Ch. 574
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(II) $25 FOR EACH BUSHEL OF S PAT–ON–SHELL THAT THE
PERSON PLANTS ON A P UBLIC FISHERY BOTTOM AS VERIFIED BY THE DEPARTMENT
OF NATURAL RESOURCES.
(C) A PERSON IS ELIGIBLE T O RECEIVE FINANCING UNDER THIS SECTION I F
THE PERSON:
(1) (I) HAS BEEN A LICENSED SEAFOOD DEALER FOR A T LEAST 5
YEARS; OR
(II) HAS HELD A TIDAL FIS H LICENSE ISSUED UND ER § 4–701 OF
THE NATURAL RESOURCES ARTICLE FOR AT LEAST 5 YEARS AND AGREES TO
OBTAIN A SEAFOOD DEA LER LICENSE ON RECEIVING FINANCING UNDER THIS
SECTION;
(2) HAS PAID ALL APPLICABLE BUSINESS TAXES AND FEES FOR THE
PAST 5 YEARS;
(3) DEMONSTRATES TO THE SATISFACTION OF THE CORPORATION
THROUGH A BUSINESS P LAN AND PRO FORMA FI NANCIAL PROJECTIONS THAT,
WITHIN 5 YEARS AFTER RECEIVIN G FINANCING UNDER TH IS SECTION, THE
PERSON’S SEAFOOD PROCESSING BUSINESS WILL:
(I) EMPLOY AT LEAST 15 INDIVIDUALS; AND
(II) HAVE THE POTENTIAL T O ACHIEVE VIABILITY AS A
BUSINESS; AND
(4) MEETS ANY OTHER ELIG IBILITY REQUIREMENTS ESTABLISHED BY
THE CORPORATION ; AND
(5) AGREES TO THE FINANC ING TERMS AND CONDIT IONS
ESTABLISHED BY THE CORPORATION THAT ARE OTHERWISE IN CONFORM ANCE
WITH THIS SECTION .
(D) (1) FOR FISCAL YEAR 2024, THE GOVERNOR SHALL INCLUD E IN THE
ANNUAL BUDGET BILL A N APPROPRIATION OF $1,000,000 TO THE CORPORATION
FOR THE PURPOSE OF P ROVIDING GRANTS AND LOANS UNDER THIS SEC TION.
(2) THE APPROPRIATION IN PARAGRAPH (1) OF THIS SUBSECTION
SHALL BE DISTRIBUTED TO A SPECIAL ACCOUNT TO BE USED ONLY TO :
(I) PROVIDE LOANS UNDER THIS SECTION; AND Ch. 574 2022 LAWS OF MARYLAND
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(II) PAY THE COSTS NECESS ARY TO ADMINISTER AN D OPERATE
THIS SECTION.
Article – Natural Resources
[4–1019.1.
The Department shall initiate the development of a program for enactment by the
Maryland General Assembly to encourage return of the State’s oyster shell resource to the
tidal waters of the State to assist oyster propagation. The Department also may use the
Fisheries Research and Development Fund to purchase oyster shell.]
4–1019.1.
(A) THE DEPARTMENT SHALL PROV IDE ANNUAL GRANTS TO NONPROFIT
ORGANIZATION S, COMMUNITY ASSOCIATIO NS, RESTAURANTS , AND SEAFOOD
PROCESSORS AND DEALERS THAT RECYCLE OYSTER SHELLS BY PROVIDING THE
SHELL TO AN AUTHORIZ ED SHELL RECYCLING C OLLECTOR CERTIFIED B Y THE
DEPARTMENT .
(B) (1) GRANTS TO NONPROFIT ORGANIZ ATIONS AND COMMUNITY
ASSOCIATIONS SHALL BE PROVIDED IN THE FOLLOWING AMOUNT S:
(I) $100 FOR THE RECYCLING OF AT LEAST 5 BUT LESS THAN 20
BUSHELS OF OYSTER SHELLS IN A YEAR; AND
(II) $250 FOR THE RECYCLING OF AT LEAST 20 BUSHELS OF
OYSTER SHELLS IN A Y EAR.
(2) GRANTS TO RESTAURANTS AND SEAFOOD PROCESSO RS AND
DEALERS SHALL BE PROVIDED IN THE FOLLOWING AMO UNTS:
(I) $100 FOR THE RECYCLING OF AT LEAST 25 BUT LESS THAN
50 BUSHELS OF OYSTER SH ELLS IN A YEAR;
(II) $250 FOR THE RECYCLING OF AT LEAST 50 BUT LESS THAN
100 BUSHELS OF OYSTER SH ELLS IN A YEAR;
(III) $500 FOR THE RECYCLING OF AT LEAST 100 BUT LESS THAN
250 BUSHELS OF OYSTER SH ELLS IN A YEAR;
LAWRENCE J. HOGAN, JR., Governor Ch. 574
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(IV) $1,000 FOR THE RECYCLING OF AT LEAST 250 BUT LESS
THAN 500 BUSHELS OF OYSTER SH ELLS IN A YEAR;
(V) $1,500 FOR THE RECYCLING OF AT LEAST 500 BUT LESS
THAN 1,000 BUSHELS OF OYSTER SH ELLS IN A YEAR; AND
(VI) $2,000 FOR THE RECYCLING OF AT LEAST 1,000 BUSHELS
OF OYSTER SHELLS IN A YEAR AT A RATE OF $5 PER BUSHEL UP TO A M AXIMUM OF
$2,000 PER YEAR.
(C) THE DEPARTMENT SHALL PROVIDE, AT NO COST, RECEPTACLES FOR
THE COLLECTION OF OY STER SHELLS TO RESTAURANTS THAT AGREE TO RECYCLE
AT LEAST 25 BUSHELS OF OYSTER SH ELLS PER YEAR .
(D) (1) THE DEPARTMENT SHALL ADOP T REGULATIONS TO CAR RY OUT
THE PROVISIONS OF THIS S ECTION.
(2) THE REGULATIONS SHALL ESTABLISH ELIGIBILIT Y CRITERIA AND
PROVIDE FOR THE CERT IFICATION OF NONPROFIT ORGANIZATI ONS, COMMUNITY
ASSOCIATIONS, RESTAURANTS , AND SEAFOOD PROCESSO RS AND DEALERS TO
VERIFY THE AMOUNT OF OYSTER SHELLS RECYCLED BY EAC H ENTITY.
(3) THE DEPARTMENT MAY ENTER INTO AGREEMENTS WITH
NONPROFIT ORGANIZATI ONS WITH EXPERTISE I N OYSTER SHELL RECYC LING TO
EXECUTE THE PROVISIO NS OF THIS SECTION .
4–1019.2.
(G) THE DEPARTMENT MAY USE TH E FISHERIES RESEARCH A ND
DEVELOPMENT FUND TO PURCHASE OYST ER SHELLS.
4–1102.
(a) The Department may resurvey any submerged area of the State to determine
the position and extent of any natural oyster bar.
(b) If, after conducting a survey in accordance with subsection (a) of this section,
the Department finds that any natural oyster bar is located incorrectly on existing charts
or that the existing charts do not reflect the actual condition of submerged lands, the
Department shall amend the existing charts or coordinates by regulation.
(C) (1) BEGINNING IN FISCAL Y EAR 2024, THE MARYLAND GEOLOGICAL
SURVEY, IN CONJUNCTION WITH THE UNIVERSITY OF MARYLAND CENTER FOR
ENVIRONMENTAL SCIENCE, SHALL SURVEY SUBMERGED ARE AS OF THE STATE TO Ch. 574 2022 LAWS OF MARYLAND
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MAP EXISTING AND POT ENTIAL OYSTER HABITA TS IN ACCORDANCE WITH T HE
PROVISIONS OF THIS S UBSECTION.
(2) IN SELECTING SITES FO R SURVEYING UNDER TH IS SUBSECTION,
THE MARYLAND GEOLOGICAL SURVEY AND THE UNIVERSITY OF MARYLAND
CENTER FOR ENVIRONMENTAL SCIENCE SHALL:
(I) PRIORITIZE PRIORITIZE:
1. (I) EASTERN BAY AND ITS TRIBUTARI ES; AND
2. (II) PUBLIC FISHERY AREAS WHERE THERE ARE LIKE LY
TO BE SHALLOWLY BURI ED SHELL DEPOSITS FR OM PREVIOUS REPLETIO N
ACTIVITIES, IDENTIFIED IN CONSUL TATION WITH THE DEPARTMENT , WHO SHALL
CONSULT WITH COUNTY OYSTER COMMITTEES , AND COMMERCIAL OYSTER
HARVESTERS ; AND
(II) AVOID IMPORTANT FISH SPAWN ING AREAS, ESPECIALLY
AREAS WHERE STRIPED BASS O R STURGEON ARE KNOWN TO SPAWN.
(3) TO THE EXTENT PRACTIC ABLE, SURVEYS CARRIED OUT UNDER
THIS SUBSECTION SHALL USE SUB–BOTTOM PROFILING COM BINED WITH PHYSICAL
SAMPLING TO QUANTIFY THE TOTAL VOLUME OF SUBSURFACE SHELL MAT ERIAL.
(4) (I) FOR FISCAL YEARS 2024 THROUGH 2026, THE GOVERNOR
SHALL INCLUDE IN THE ANNUAL BUDGET BILL A N APPROPRIATION OF $2,000,000
TO THE DEPARTMENT TO FUND THE SURVEYS REQ UIRED UNDER THIS SUB SECTION.
(II) THE GOVERNOR SHALL PRIORI TIZE THE USE OF FEDE RAL
FUNDS FOR APPROPRIAT IONS REQUIRED UNDER THIS PARAGRAPH .
SECTION 3. AND BE IT FURTHER ENACTED, That :
(a) The University of Maryland Center for Environmental Science shall
collaborate with the Smithsonian Environmental Research Center, the Virginia Institute
of Marine Science, appropriate State and federal agencies, and industry and other
stakeholders to research evaluate:
(1) the types of substrate, including fresh shell, fossilized shell,
combinations of shell, and alternative substrates, that are most appropriate for use in
oyster harvest areas;
(2) the benefits, including habitat–related benefits, of using larger stones
versus smaller stones of various sizes in oyster restoration areas; LAWRENCE J. HOGAN, JR., Governor Ch. 574
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(3) alternative substrates used for oyster restoration or repletion in other
regions, including the success of efforts to use alternative substrates; and
(4) the potential for retrofitting existing structures, such as riprap
revetments, that are unrelated to oyster restoration but that use materials similar to
artificial reefs, to include oyster plantings; and
(5) the effect of spat size upon deployment on oyster abundance.
(b) On or before December 1, 2025, the University of Maryland Center for
Environmental Science shall report to the Secretary of Natural Resources and, in
accordance with § 2–1257 of the State Government Article, the General Assembly on its
research findings evaluations under this section.
(c) For fiscal years 2024 and 2025, the Governor shall include in the annual
budget bill an appropriation of $250,000 for the University of Maryland Center for
Environmental Science to carry out the research required under this section.
(d) The evaluations undertaken in accordance with this section shall be conducted
in a manner that is not disruptive to the public oyster fishery, aquaculture, or restoration.
SECTION 4. AND BE IT FURTHER ENACTED, That:
(a) On or before December 1, 2023, the Department of Natural Resources shall
submit a plan to the Governor and, in accordance with § 2–1257 of the State Government
Article, the General Assembly describing the substrate needs for oyster restoration and
repletion, aquaculture, and restoration activities in the State over the next 10 years.
(b) The plan shall include:
(1) an estimate of the quantity of the substrate materials that will be
needed and the purposes for which the substrate materials will be used;
(2) an overview of the full spectrum of substrate materials available;
(3) an analysis of the availability, sourcing, and relative cost of each
substrate material;
(4) an estimate of the total and annual costs of implementing the plan; and
(5) opportunities for improving the cost–effectiveness of substrate
acquisition and use, including opportunities for increasing coordination with the
Commonwealth of Virginia, undertaking larger–scale projects to take advantage of
economies of scale, and reducing mobilization and demobilization costs.
Ch. 574 2022 LAWS OF MARYLAND
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SECTION 5. AND BE IT FURTHER ENACTED, That :
(a) It is the intent of the General Assembly that by 2025, oyster hatcheries in the
State shall be capable of consistently producing 5 billion larvae or spat–on–shell spat per
year.
(b) To help reach the goal established under subsection (a) of this section, for
fiscal year 2024, the Governor shall include in the annual operating or capital budget:
(1) an appropriation of $20,000,000 for the University of Maryland Center
for Environmental Science to build a second oyster hatchery, to be named after Michael E.
Busch, former Speaker of the House of Delegates; and
(2) an appropriation of $2,500,000 for the Patuxent Environmental and
Aquatic Research Laboratory, Morgan State University, to be used for infrastructure
upgrades to support increased oyster production for research and restoration.
SECTION 6. AND BE IT FURTHER ENACTED, That:
(a) (1) In recognition of the final report, dated December 1, 2021, of the Oyster
Advisory Commission’s consensus recommendations, over the next 25 years, a combination
of replenishment, restoration, and aquaculture activities should be collectively planned and
undertaken in Eastern Bay, with an equal amount of funding for spat planting in
sanctuaries ($1,000,000 annually adjusted for inflation) and for spat and shell planting on
fishery bars ($1,000,000 annually adjusted for inflation) in addition to current
replenishment and restoration activities.
(2) The effectiveness of the activities under paragraph (1) of this subsection
shall be evaluated every 5 years.
(b) To help reach the goals established under subsection (a) of this section, for
fiscal years 2024 through 2026, the Governor shall include in the annual operating or
capital budget an appropriation of $2,000,000 for the Department of Natural Resources.
(c) Any funding provided in the operating or capital budgets in accordance with
subsection (b) of this section after fiscal year 2026 shall be contingent upon the evaluation
provided for in subsection (a)(2) of this section.
SECTION 6. 7. AND BE IT FURTHER ENACTED, That Section 1 of this Act shall
take effect July 1, 2023, and shall be applicable to all taxable years beginning after
December 31, 2021 2022.
SECTION 7. 8. AND BE IT FURTHER ENACTED, That , except as provided in
Section 7 of this Act, this Act shall take effect July 1, 2022.
Enacted under Article II, § 17(c) of the Maryland Constitution, May 29, 2022.