EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0165*
HOUSE BILL 165
L6 4lr0510
(PRE–FILED) CF 4lr1734
By: Delegate J. Lewis
Requested: August 15, 2023
Introduced and read first time: January 10, 2024
Assigned to: Environment and Transportation
A BILL ENTITLED
AN ACT concerning 1
Local Government – Annual Audit Reporting Requirements – Alterations 2
FOR the purpose of requiring a certain amount of State aid to be discontinued if a county, 3
municipality, or special taxing district does not submit a certain audit report within 4
a certain period of time after the deadline for the report, subject to a certain 5
condition; and generally relating to local government reporting requirements. 6
BY repealing and reenacting, without amendments, 7
Article – Local Government 8
Section 16–304 9
Annotated Code of Maryland 10
(2013 Volume and 2023 Supplement) 11
BY repealing and reenacting, with amendments, 12
Article – Local Government 13
Section 16–306 14
Annotated Code of Maryland 15
(2013 Volume and 2023 Supplement) 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Local Government 19
16–304. 20
(a) (1) Except as provided in paragraph (2) of this subsection, on or before 21
October 31 after the close of its fiscal year, each county, municipality, and special taxing 22
district shall file with the Department of Legislative Services a financial report for that 23
fiscal year. 24 2 HOUSE BILL 165
(2) (i) A county, municipality, or special taxing district with a 1
population of over 400,000 may file its financial report on or before December 31 after the 2
close of its fiscal year. 3
(ii) Unless subparagraph (i) of this paragraph applies, Howard 4
County may file its financial report on or before November 30 after the close of its fiscal 5
year. 6
(iii) Allegany County, Calvert County, Caroline County, Charles 7
County, Frederick County, Garrett County, Queen Anne’s County, St. Mary’s County, 8
Somerset County, Talbot County, and Wicomico County may file the county’s financial 9
report on or before December 31 after the close of the county’s fiscal year. 10
(b) The financial report required under subsection (a) of this section shall be: 11
(1) prepared on the form established by the Department of Legislative 12
Services; and 13
(2) verified by the chief executive officer of the county, municipality, or 14
special taxing district. 15
(c) If a county, municipality, or special taxing district does not comply with 16
subsection (a) of this section, the Comptroller, on notice from the Executive Director of the 17
Department of Legislative Services, may order the discontinuance of all money, grants, or 18
State aid that the county, municipality, or special taxing district is entitled to receive under 19
State law, including money from: 20
(1) the income tax; 21
(2) the tax on racing; 22
(3) the recordation tax; 23
(4) the admissions and amusement tax; and 24
(5) the license tax. 25
16–306. 26
(a) The county, municipality, or special taxing district shall report the results of 27
the audit required under § 16–305 of this subtitle to the Legislative Auditor: 28
(1) on the form and in the manner that the Legislative Auditor requires; 29
and 30
HOUSE BILL 165 3
(2) on or before the date the financial report of the county, municipality, or 1
special taxing district must be filed under § 16–304(a) of this subtitle. 2
(b) An audit report filed by a county, municipality, or special taxing district with 3
the Legislative Auditor shall include financial statements of the county, municipality, or 4
special taxing district that are: 5
(1) prepared in accordance with generally accepted accounting principles; 6
and 7
(2) audited in accordance with generally accepted auditing standards. 8
(c) An audit report filed with the Legislative Auditor is a public record. 9
(d) [If] EXCEPT AS PROVIDED IN SUBSECTION (E) OF THIS SECTION , IF a 10
county, municipality, or special taxing district does not comply with subsection (a) or (b) of 11
this section, the Comptroller, on notice from the Executive Director of the Department of 12
Legislative Services, may order the discontinuance of all money, grants, or State aid that 13
the county, municipality, or special taxing district is entitled to receive under State law 14
that are distributed by the Comptroller, the clerks of the court, or any other unit of State 15
government. 16
(E) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IF A COUNTY, 17
MUNICIPALITY, OR SPECIAL TAXING DI STRICT DOES NOT COMP LY WITH SUBSECTION 18
(A) OR (B) OF THIS SEC TION WITHIN 1 CALENDAR YEAR AFTER THE DEADLINE 19
DESCRIBED IN SUBSECT ION (A)(2) OF THIS SECTION, THE EXECUTIVE DIRECTOR OF 20
THE DEPARTMENT OF LEGISLATIVE SERVICES SHALL NOTIFY THE COMPTROLLER 21
AND THE COMPTROLLER SHALL ORD ER THE DISCONTINUANC E OF 20% OF ALL 22
STATE AID FOR POLICE A ID, HIGHWAY USER REVENUE S, AND DISPARITY GRANTS 23
THAT THE COUNTY , MUNICIPALITY, OR SPECIAL TAXING DI STRICT IS ENTITLED T O 24
RECEIVE UNDER STATE LAW THAT IS DIS TRIBUTED BY THE COMPTROLLER , THE 25
CLERKS OF THE COURT , OR ANY OTHER UNIT OF STATE GOVERNMENT . 26
(2) (I) A DISCONTINUANCE OF FUNDS UNDER PARAGRAPH (1) OF 27
THIS SUBSECTION SHALL REMAIN IN EFFECT FOR A COUNTY, MUNICIPALITY, OR 28
SPECIAL TAXING DISTR ICT UNTIL THE COUNTY, MUNICIPALITY, OR SPECIAL TAXING 29
DISTRICT SUBMITS THE AUDIT REPORT REQUI RED UNDER THIS SECTI ON. 30
(II) 1. SUBJECT TO SUBSUBPARA GRAPH 2 OF THIS 31
SUBPARAGRAPH , THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF 32
LEGISLATIVE SERVICES SHALL NOTIFY THE COMPTROLLER AND THE 33
COMPTROLLER SHALL ORD ER THE CONTINUANCE O F THE FUNDS DISCONTI NUED 34
UNDER PARAGRAPH (1) OF THIS SUBSECTION PROMPTLY AFTER THE COUNTY, 35
MUNICIPALITY, OR SPECIAL TAXING DI STRICT SUBMITS THE AUDIT RE PORT 36
REQUIRED UNDER THIS SECTION. 37 4 HOUSE BILL 165
2. A. IF A CONTINUANCE OF F UNDS IS ORDERED 1
UNDER SUBSUBPARAGRAP H 1 OF THIS SUBPARAGRAPH , ONLY THE DISCONTINUED 2
FUNDS FOR THE CURRENT FISCAL YEAR SHALL BE RELEASED. 3
B. FOR ANY FISCAL YEAR I N WHICH A COUNTY , 4
MUNICIPALITY, OR SPECIAL TAXING DI STRICT FAILED TO SUBMIT THE AUDIT 5
REPORT REQUIRED UNDE R THIS SECTION, THE DISCONTINUED FUN DS FOR THAT 6
FISCAL YEAR SHALL RE VERT TO THE GENERAL FUND OF THE STATE. 7
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 8
1, 2025. 9