EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0038*
SENATE BILL 38
C8 3lr0936
SB 252/21 – FIN (PRE–FILED)
By: Senator Ellis
Requested: November 18, 2022
Introduced and read first time: January 11, 2023
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Minority Business Enterprise Procurement Contract Financing 2
FOR the purpose of establishing a Minority Business Enterprise Procurement Contract 3
Financing Program in the Maryland Small Business Development Financing 4
Authority to provide working capital to qualified minority business enterprises in 5
order to facilitate their ability to enter into and complete performance under State 6
procurement contracts; authorizing certain loans and grants under certain 7
circumstances; establishing the Minority Business Enterprise Procurement Contract 8
Financing Fund as a special, nonlapsing fund; and generally relating to the Minority 9
Business Enterprise Procurement Contract Financing Program. 10
BY repealing and reenacting, without amendments, 11
Article – Economic Development 12
Section 5–501 and 5–505 13
Annotated Code of Maryland 14
(2018 Replacement Volume and 2022 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – Economic Development 17
Section 5–512(c) 18
Annotated Code of Maryland 19
(2018 Replacement Volume and 2022 Supplement) 20
BY adding to 21
Article – Economic Development 22
Section 5–578 through 5–580 to be under the new part “Part VII. Minority Business 23
Enterprise Procurement Contract Financing Program” 24
Annotated Code of Maryland 25
(2018 Replacement Volume and 2022 Supplement) 26
2 SENATE BILL 38
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Economic Development 3
5–501. 4
(a) In this subtitle the following words have the meanings indicated. 5
(b) “Authority” means the Maryland Small Business Development Financing 6
Authority. 7
(c) “Financial institution” means: 8
(1) a financial institution, as defined in § 1–101 of the Financial 9
Institutions Article; and 10
(2) any other lender that the Authority approves. 11
(d) (1) “Loan document” means an instrument or agreement that evidences, 12
secures, or guarantees a loan. 13
(2) “Loan document” includes a note, financing statement, mortgage, 14
pledge, assignment, loan and security agreement, or guaranty. 15
(e) (1) “Working capital” means money used to meet the cash needs of an 16
operating business entity. 17
(2) “Working capital” does not include money used for a capital purchase. 18
5–505. 19
There is a Maryland Small Business Development Financing Authority in the 20
Department. 21
5–512. 22
(c) The Authority shall: 23
(1) in its internal functions, follow the procedures of the State that govern 24
the purchase of office space, supplies, facilities, materials, equipment, and professional 25
services; 26
(2) keep proper records of its accounts; 27
(3) keep separate records for: 28
SENATE BILL 38 3
(i) the Small Business Development Contract Financing Fund 1
under Part III of this subtitle; 2
(ii) the Small Business Development Guaranty Fund under Part IV 3
of this subtitle; 4
(iii) the Equity Participation Investment Program Fund under Part 5
V of this subtitle; [and] 6
(iv) the Small Business Surety Bond Fund under Part VI of this 7
subtitle; and 8
(V) THE MINORITY BUSINESS ENTERPRISE PROCUREMENT 9
CONTRACT FINANCING PROGRAM AND FUND UNDER PART VII OF THIS SUBTITLE ; 10
AND 11
(4) in accordance with § 2.5–109 of this article, submit a report on its 12
condition and operations. 13
5–576. RESERVED. 14
5–577. RESERVED. 15
PART VII. MINORITY BUSINESS ENTERPRISE PROCUREMENT CONTRACT 16
FINANCING PROGRAM. 17
5–578. 18
(A) IN THIS PART THE FOLL OWING WORDS HAVE THE MEANINGS 19
INDICATED. 20
(B) “FUND” MEANS THE MINORITY BUSINESS ENTERPRISE PROCUREMENT 21
CONTRACT FINANCING FUND. 22
(C) “MINORITY BUSINESS ENT ERPRISE” HAS THE MEANING STAT ED IN § 23
14–301 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 24
(D) “PROGRAM” MEANS THE MINORITY BUSINESS ENTERPRISE 25
PROCUREMENT CONTRACT FINANCING PROGRAM. 26
(E) “QUALIFIED MINORITY BU SINESS ENTERPRISE ” MEANS A MINORITY 27
BUSINESS ENTERPRISE THAT IS: 28
(1) CERTIFIED IN ACCORDA NCE WITH TITLE 14, SUBTITLE 3 OF THE 29
STATE FINANCE AND PROCUREMENT ARTICLE; AND 30 4 SENATE BILL 38
(2) HAS A NET WORTH THAT DOES NOT EXCEED $2,000,000. 1
5–579. 2
(A) THERE IS A MINORITY BUSINESS ENTERPRISE PROCUREMENT 3
CONTRACT FINANCING PROGRAM IN THE AUTHORITY. 4
(B) THE PURPOSE OF THE PROGRAM IS TO PROVIDE WORKING CAPITAL TO 5
QUALIFIED MINORITY B USINESS ENTERPRISES IN ORDER TO FACILITA TE THEIR 6
ABILITY TO ENTER INT O AND COMPLETE PERFO RMANCE UNDER STATE 7
PROCUREMENT CONTRACT S. 8
(C) THE AUTHORITY SHALL : 9
(1) MANAGE, SUPERVISE, AND ADMINISTER THE PROGRAM; 10
(2) PROVIDE LOANS AND AW ARD GRANTS IN ACCORD ANCE WITH THE 11
PURPOSE OF THE PROGRAM; AND 12
(3) ADOPT REGULATIONS TO : 13
(I) ENSURE THAT LOANS AN D GRANTS TO QUALIFIED MINORITY 14
BUSINESS ENTERPRISES CARRY OUT THE PURPOS ES OF THE PROGRAM; 15
(II) PROVIDE FOR APPLICAT ION PROCEDURES FOR G RANTS 16
AND LOANS UNDER THE PROGRAM; 17
(III) ATTACH SPECIFIC TERM S TO ANY LOAN OR GRA NT THAT ARE 18
CONSIDERED NECESSARY TO ENSURE THAT THE P URPOSE OF THE PROGRAM IS 19
FULFILLED; AND 20
(IV) PROVIDE FOR PROCEDUR ES FOR THE REPAYMENT OF 21
LOANS MADE UNDER THE PROGRAM. 22
5–580. 23
(A) THERE IS A MINORITY BUSINESS ENTERPRISE PROCUREMENT 24
CONTRACT FINANCING FUND IN THE AUTHORITY. 25
(B) THE AUTHORITY SHALL ADMIN ISTER THE FUND. 26
(C) (1) THE FUND IS A SPECIAL , NONLAPSING FUND THAT IS NOT 27 SENATE BILL 38 5
SUBJECT TO REVERSION UNDER § 7–302 OF THE STATE FINANCE AND 1
PROCUREMENT ARTICLE. 2
(2) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , 3
AND THE COMPTROLLER SHALL ACCOUNT FOR THE FUND. 4
(D) THE FUND CONSISTS OF : 5
(1) MONEY APPROPRIATED I N THE STATE BUDGET TO THE FUND; 6
(2) IF THE GENERAL ASSEMBLY ENACTS LEGIS LATION 7
IMPLEMENTING SPORTS AND EVENT WAGERING I N THE STATE, AN AMOUNT EQUAL 8
TO 10% OF ANY PROCEEDS RECEIVED BY THE STATE FROM SPORTS AND EVENT 9
WAGERING IN THE STATE; 10
(3) FEDERAL MONEY ALLOCA TED OR GRANTED TO TH E FUND; 11
(4) REPAYMENTS AND PREPA YMENTS OF PRINCIPAL AND INTEREST 12
ON LOANS MADE FROM T HE FUND; AND 13
(5) ANY OTHER MONEY FROM ANY SOURCE ACCEPTED FOR THE 14
BENEFIT OF THE FUND. 15
(E) THE FUND MAY BE USED ONLY FOR: 16
(1) LOANS AND GRANTS PRO VIDED UNDER THE PROGRAM; AND 17
(2) ADMINISTRATIVE EXPEN SES OF THE PROGRAM. 18
(F) (1) THE STATE TREASURER SHALL INVES T THE MONEY IN THE FUND 19
IN THE SAME MANNER AS OTH ER STATE MONEY MAY BE IN VESTED. 20
(2) ANY INVESTMENT EARNIN GS OF THE FUND SHALL BE CREDITE D 21
TO THE GENERAL FUND OF THE STATE. 22
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 23
October 1, 2023. 24