EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1471*
HOUSE BILL 1471
P2 4lr3431
CF SB 363
By: Delegate Tomlinson
Introduced and read first time: February 14, 2024
Assigned to: Rules and Executive Nominations
A BILL ENTITLED
AN ACT concerning 1
Procurement Contracts – Disclosures to Secretary of State – Beneficial 2
Ownership 3
FOR the purpose of altering the definition of “beneficial ownership” for the purposes of 4
certain disclosures made by certain businesses to the Secretary of State under 5
certain circumstances; and generally relating to beneficial ownership and 6
procurement contracts. 7
BY repealing and reenacting, with amendments, 8
Article – State Finance and Procurement 9
Section 13–221 10
Annotated Code of Maryland 11
(2021 Replacement Volume and 2023 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – State Finance and Procurement 15
13–221. 16
(a) The provisions of this section are broadly applicable and apply to all contracts, 17
leases, or other agreements entered into by the State. 18
(b) (1) In this section, “beneficial ownership” means: 19
(i) any ownership interest of [5%] 25% or more in a business OR 20
TRUST; 21
(ii) any ownership interest of [5%] 25% or more in 1 or more entities 22 2 HOUSE BILL 1471
in a chain of parent and subsidiary entities, any 1 of which participates in at least [5%] 1
25% of the capital or profits of a business OR TRUST; [or] 2
(iii) possession of an interest that exists under an agreement, 3
contract, relationship, understanding, or other arrangement and entitles a person to 4
benefits substantially equivalent to an ownership interest of [5%] 25% or more of a 5
business OR TRUST; OR 6
(IV) ANY OWNERSHIP INTERE ST WITH SIGNIFICANT 7
RESPONSIBILITY TO CO NTROL, MANAGE, OR DIRECT A BUSINESS OR TRUST, 8
INCLUDING ACTING AS AN EXECUTIVE OFFICER OR A SENIOR MANAGER . 9
(2) In this section, unless there are special circumstances, an individual is 10
deemed to hold an ownership interest that is held by the individual’s spouse, the 11
individual’s child, or other relative of the individual who lives in the individual’s home. 12
(c) (1) If, during a calendar year, a business enters into contracts, leases, or 13
other agreements, with the State or its units or both, under which the business is to receive 14
from the State or its units or both a total of $200,000 or more, the business shall file with 15
the Secretary of State a list that contains the name and address of: 16
(i) any resident agent of the business; 17
(ii) each officer of the business; and 18
(iii) if known, each person who has beneficial ownership of the 19
business. 20
(2) The list shall be filed within 30 days of the date when the total value of 21
the contracts, leases, or other agreements entered into during the calendar year reaches 22
$200,000. 23
(3) If a person who has beneficial ownership is unknown to the business, it 24
is sufficient for the business to disclose the legal ownership or the identity of the nominee 25
who holds title for the unknown person. 26
(d) A business or an officer of a business who violates any provision of this section 27
is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $10,000. 28
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 29
October 1, 2024. 30