EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*hb0165*
HOUSE BILL 165
L6 (4lr0510)
ENROLLED BILL
— Environment and Transportation/Budget and Taxation —
Introduced by Delegate J. Lewis
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at __ ______________________ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
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 2 HOUSE BILL 165
Section 16–306 1
Annotated Code of Maryland 2
(2013 Volume and 2023 Supplement) 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That the Laws of Maryland read as follows: 5
Article – Local Government 6
16–304. 7
(a) (1) Except as provided in paragraph (2) of this subsection, on or before 8
October 31 after the close of its fiscal year, each county, municipality, and special taxing 9
district shall file with the Department of Legislative Services a financial report for that 10
fiscal year. 11
(2) (i) A county, municipality, or special taxing district with a 12
population of over 400,000 may file its financial report on or before December 31 after the 13
close of its fiscal year. 14
(ii) Unless subparagraph (i) of this paragraph applies, Howard 15
County may file its financial report on or before November 30 after the close of its fiscal 16
year. 17
(iii) Allegany County, Calvert County, Caroline County, Charles 18
County, Frederick County, Garrett County, Queen Anne’s County, St. Mary’s County, 19
Somerset County, Talbot County, and Wicomico County may file the county’s financial 20
report on or before December 31 after the close of the county’s fiscal year. 21
(b) The financial report required under subsection (a) of this section shall be: 22
(1) prepared on the form established by the Department of Legislative 23
Services; and 24
(2) verified by the chief executive officer of the county, municipality, or 25
special taxing district. 26
(c) If a county, municipality, or special taxing district does not comply with 27
subsection (a) of this section, the Comptroller, on notice from the Executive Director of the 28
Department of Legislative Services, may order the discontinuance of all money, grants, or 29
State aid that the county, municipality, or special taxing district is entitled to receive under 30
State law, including money from: 31
(1) the income tax; 32
(2) the tax on racing; 33
HOUSE BILL 165 3
(3) the recordation tax; 1
(4) the admissions and amusement tax; and 2
(5) the license tax. 3
16–306. 4
(a) The county, municipality, or special taxing district shall report the results of 5
the audit required under § 16–305 of this subtitle to the Legislative Auditor: 6
(1) on the form and in the manner that the Legislative Auditor requires; 7
and 8
(2) on or before the date the financial report of the county, municipality, or 9
special taxing district must be filed under § 16–304(a) of this subtitle. 10
(b) An audit report filed by a county, municipality, or special taxing district with 11
the Legislative Auditor shall include financial statements of the county, municipality, or 12
special taxing district that are: 13
(1) prepared in accordance with generally accepted accounting principles; 14
and 15
(2) audited in accordance with generally accepted auditing standards. 16
(c) An audit report filed with the Legislative Auditor is a public record. 17
(d) [If] EXCEPT AS PROVIDED IN SUBSECTION (E) OF THIS SECTION , IF a 18
county, municipality, or special taxing district does not comply with subsection (a) or (b) of 19
this section, the Comptroller, on notice from the Executive Director of the Department of 20
Legislative Services, may order the discontinuance of all money, grants, or State aid that 21
the county, municipality, or special taxing district is entitled to receive under State law 22
that are distributed by the Comptroller, the clerks of the court, or any other unit of State 23
government. 24
(E) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IF A COUNTY, 25
MUNICIPALITY, OR SPECIAL TAXING DI STRICT DOES NOT COMP LY WITH SUBSECTION 26
(A) OR (B) OF THIS SECTION WITH IN 1 3 2 CALENDAR YEAR YEARS AFTER THE 27
DEADLINE DESCRIBED I N SUBSECTION (A)(2) OF THIS SECTION , THE EXECUTIVE 28
DIRECTOR OF THE DEPARTMENT OF LEGISLATIVE SERVICES SHALL NOTIFY THE 29
COMPTROLLER AND THE COMPTROLLER SHALL ORD ER THE DISCONTINUANC E OF 30
20% OF ALL STATE AID FOR POLICE AID, THE CURRENT FI SCAL YEAR FOR HIGHWAY 31
USER REVENUES AND DISPARITY GRANTS , AND DISPARITY GRANTS THAT THE 32
COUNTY, MUNICIPALITY, OR SPECIAL TAXING DI STRICT IS OTHERWISE ENTITLED TO 33 4 HOUSE BILL 165
RECEIVE UNDER STATE LAW THAT IS DIS TRIBUTED BY THE COMPTROLLER , THE 1
CLERKS OF THE COURT , OR ANY OTHER UNIT OF STATE GOVERNMENT . 2
(2) (I) A DISCONTINUANCE OF FU NDS UNDER PARAGRAPH (1) OF 3
THIS SUBSECTION SHAL L REMAIN IN EFFECT F OR A COUNTY , MUNICIPALITY, OR 4
SPECIAL TAXING DISTR ICT UNTIL THE COUNTY , MUNICIPALITY, OR SPECIAL TAXING 5
DISTRICT SUBMITS T HE AUDIT REPORT REQU IRED UNDER THIS SECT ION. 6
(II) 1. SUBJECT TO SUBSUBPARA GRAPH 2 OF THIS 7
SUBPARAGRAPH , THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF 8
LEGISLATIVE SERVICES SHALL NOTIFY THE COMPTROLLER AND THE 9
COMPTROLLER SHALL ORD ER THE CONTINUANCE REINSTATEMENT OF THE FUNDS 10
DISCONTINUED UNDER P ARAGRAPH (1) OF THIS SUBSECTION P ROMPTLY AFTER THE 11
COUNTY, MUNICIPALITY, OR SPECIAL TAXING DI STRICT SUBMITS THE A UDIT 12
REPORT REQUIRED UNDE R THIS SECTION. 13
2. A. IF A CONTINUANCE REINSTATEMENT OF FUNDS 14
IS ORDERED UNDER SUBSUB PARAGRAPH 1 OF THIS SUBPARAGRAPH , ONLY THE 15
DISCONTINUED FUNDS F OR THE CURRENT FISCA L YEAR SHALL BE RELE ASED. 16
B. FOR ANY FISCAL YEAR I N WHICH IF A COUNTY, 17
MUNICIPALITY, OR SPECIAL TAXING DI STRICT FAILED TO SUB MIT THE AUDIT 18
REPORT RE QUIRED UNDER THIS SE CTION IN THE SAME FISCAL Y EAR IN WHICH IT 19
WAS DUE, THE DISCONTINUED FUN DS FOR THAT FISCAL Y EAR SHALL REVERT TO 20
THE GENERAL FUND OF THE STATE FOR DISCONTINUED DIS PARITY GRANTS AND TO 21
THE TRANSPORTATION TRUST FUND FOR DISCONTINUED HIGHWAY USER 22
REVENUES. 23
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply beginning 24
with the fiscal year 2024 audits that are required to be submitted under § 16–306 of the 25
Local Government Article, enacted by Section 1 of this Act. 26
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 27
July 1, 2025. 28