EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING 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.
*hb0962*
HOUSE BILL 962
P2 4lr2688
CF SB 673
By: Delegates Phillips, Boafo, Harris, J. Long, McCaskill, Pasteur, Roberson,
Roberts, White Holland, Wilkins, Williams, and Woods Woods, Alston,
Bagnall, Bhandari, Chisholm, Cullison, Guzzone, Hill, Hutchinson,
S. Johnson, Kaiser, Kerr, Kipke, R. Lewis, Lopez, Martinez, M. Morgan,
Pena–Melnyk, Reilly, Rosenberg, Szeliga, and Taveras
Introduced and read first time: February 2, 2024
Assigned to: Health and Government Operations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 3, 2024
CHAPTER ______
AN ACT concerning 1
State Procurement – Small and Minority Business Reserve Program – Goals and 2
Outreach Program 3
(Parren J. Mitchell MBE Prime Contracting Act) 4
FOR the purpose of altering the Small Business Reserve Program to be the Small and 5
Minority Business Reserve Program; requiring a unit of State government, to the 6
extent practicable, to structure its procurement procedures to achieve a certain 7
minimum percentage of the unit’s total dollar value of certain contracts to be made 8
directly to certified minority business enterprises; requiring a certain study to 9
include the Small and Minority Business Reserve Program altering a certain 10
participation goal for certain small businesses for certain procurement contracts; 11
requiring the certification agency, in consultation with the Governor’s Office of 12
Small, Minority, and Women Business Affairs to develop a certain outreach program; 13
altering the content of certain unit reports; and generally relating to the Small and 14
Minority Business Reserve Program. 15
BY repealing and reenacting, without amendments, 16
Article – State Finance and Procurement 17
Section 14–301(a), (b), and (d) (c), (d), and (e) 18
Annotated Code of Maryland 19
(2021 Replacement Volume and 2023 Supplement) 20 2 HOUSE BILL 962
BY repealing and reenacting, with amendments, 1
Article – State Finance and Procurement 2
Section 14–501, 14–502, and 14–505 3
Annotated Code of Maryland 4
(2021 Replacement Volume and 2023 Supplement) 5
BY adding to 6
Article – State Finance and Procurement 7
Section 14–504.1 8
Annotated Code of Maryland 9
(2021 Replacement Volume and 2023 Supplement) 10
BY repealing and reenacting, with amendments, 11
Article – State Finance and Procurement 12
Section 14–501, 14–502, 14–502.1, and 14–503 through 14–505 to be under the 13
amended subtitle “Subtitle 5. Small and Minority Business Reserve Program” 14
Annotated Code of Maryland 15
(2021 Replacement Volume and 2023 Supplement) 16
BY repealing and reenacting, with amendments, 17
Chapter 154 of the Acts of the General Assembly of 2012, as amended by Chapters 18
200 and 201 of the Acts of the General Assembly of 2013, Chapter 340 of the 19
Acts of the General Assembly of 2017, Chapter 117 of the Acts of the General 20
Assembly of 2022, and Chapters 137 and 138 of the Acts of the General 21
Assembly of 2023 22
Section 2 23
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 24
That the Laws of Maryland read as follows: 25
Article – State Finance and Procurement 26
14–301. 27
(a) In this subtitle the following words have the meanings indicated. 28
(b) “Certification” means the determination that a legal entity is a minority 29
business enterprise for the purposes of this subtitle. 30
(c) “Certification agency” means the agency designated by the Board of Public 31
Works under § 14–303(b) of this subtitle to certify and decertify minority business 32
enterprises. 33
(d) “Certified minority business enterprise” means a minority business enterprise 34
that holds a certification. 35
HOUSE BILL 962 3
(e) “Economically disadvantaged individual” means a socially disadvantaged 1
individual whose ability to compete in the free enterprise system has been impaired due to 2
diminished capital and credit opportunities as compared to others in the same or similar 3
line of business who are not socially disadvantaged. 4
Subtitle 5. Small AND MINORITY Business Reserve Program. 5
14–501. 6
(a) In this subtitle the following words have the meanings indicated. 7
(B) “CERTIFIED MINORITY BU SINESS ENTERPRISE ” HAS THE MEANING 8
STATED UNDER § 14–301 OF THIS TITLE. 9
(B) “CERTIFICATION AGENCY ” HAS THE MEANING STA TED IN § 14–301 OF 10
THIS TITLE. 11
(C) “ECONOMICALLY DISADVAN TAGED INDIVIDUAL ” HAS THE MEANING 12
STATED IN § 14–301 OF THIS TITLE. 13
[(b)] (C) (D) “Small business” means: 14
(1) a certified minority business enterprise[, as defined in § 14–301 of this 15
title,] that meets the criteria specified under item (3) of this subsection; 16
(2) a veteran–owned small business enterprise, as defined in § 14–601 of 17
this title, that meets the criteria specified under item (3) of this subsection; or 18
(3) a business, other than a broker, that meets the following criteria: 19
(i) the business is independently owned and operated; 20
(ii) the business is not a subsidiary of another business; 21
(iii) the business is not dominant in its field of operation; and 22
(iv) 1. A. the wholesale operations of the business did not 23
employ more than 50 persons in its most recently completed 3 fiscal years; 24
B. the retail operations of the business did not employ more 25
than 25 persons in its most recently completed 3 fiscal years; 26
C. the manufacturing operations of the business did not 27
employ more than 100 persons in its most recently completed 3 fiscal years; 28
4 HOUSE BILL 962
D. the service operations of the business did not employ more 1
than 100 persons in its most recently completed 3 fiscal years; 2
E. the construction operations of the business did not employ 3
more than 50 persons in its most recently completed 3 fiscal years; and 4
F. the architectural and engineering services of the business 5
did not employ more than 100 persons in its most recently completed 3 fiscal years; or 6
2. A. the gross sales of the wholesale operations of the 7
business did not exceed an average of $4,000,000 in its most recently completed 3 fiscal 8
years; 9
B. the gross sales of the retail operations of the business did 10
not exceed an average of $3,000,000 in its most recently completed 3 fiscal years; 11
C. the gross sales of the manufacturing operations of the 12
business did not exceed an average of $2,000,000 in its most recently completed 3 fiscal 13
years; 14
D. the gross sales of the service operations of the business did 15
not exceed an average of $10,000,000 in its most recently completed 3 fiscal years; 16
E. the gross sales of the construction operations of the 17
business did not exceed an average of $7,000,000 in its most recently completed 3 fiscal 18
years; and 19
F. the gross sales of the architectural and engineering 20
services of the business did not exceed an average of $4,500,000 in its most recently 21
completed 3 fiscal years. 22
[(c)] (D) (E) “Small AND MINORITY business reserve” means those procurements 23
that are limited to responses from small businesses OR CERTIFIED MINORIT Y BUSINESS 24
ENTERPRISES under [§ 14–502(b)] § 14–502(C) of this subtitle. 25
14–502. 26
(a) Except as provided in subsection (d) of this section, this subtitle applies to all 27
procurements by a unit. 28
(b) This section does not apply to procurements subject to Subtitle 1 of this title. 29
(c) To the extent practicable, a unit shall structure its procurement procedures to 30
achieve a minimum of: 31
HOUSE BILL 962 5
(1) 15% 20% of the unit’s total dollar value of goods, supplies, services, 1
maintenance, construction, construction–related services, and architectural and 2
engineering service contracts to be made directly to small businesses; AND 3
(2) 10% OF THE UNIT’S TOTAL DOLLAR VALUE OF GOODS, SUPPLIES, 4
SERVICES, MAINTENANCE , CONSTRUCTION , CONSTRUCTION –RELATED SERVICES , 5
AND ARCHITECTURAL AN D ENGINEERING SERVIC E CONTRACTS TO BE MA DE 6
DIRECTLY TO CERTIFIE D MINORITY BUSINESS ENTERPRISES . 7
(d) The total dollar value of procurements by a unit does not include the value of 8
contracts to which this section does not apply because of a conflict with federal law. 9
(e) A unit may apply toward the unit’s overall annual Small AND MINORITY 10
Business Reserve payment achievement only those payments resulting from a procurement 11
that is designated a Small AND MINORITY Business Reserve procurement ACHIEVEMENT 12
AWARDS MADE TO A SMA LL BUSINESS UNDER DE SIGNATED SMALL BUSIN ESS 13
RESERVE CONTRACTS AS WELL AS AWARDS MADE TO A SMALL BUSINESS UNDER 14
NONDESIGNATED SMALL BUSINESS RESERVE CON TRACTS. 15
(f) (1) The Special Secretary for the Office of Small, Minority, and Women 16
Business Affairs, in consultation with the Attorney General, shall establish standards and 17
guidelines for participation in the Small AND MINORITY Business Reserve Program every 18
5 years. 19
(2) The standards and guidelines established under paragraph (1) of this 20
subsection shall allow for the registration of businesses for participation in the Small AND 21
MINORITY Business Reserve Program without the need to file any additional paperwork 22
other than evidence that the business: 23
(i) is a small business under this subtitle; and 24
(ii) 1. is certified as a minority business enterprise under 25
Subtitle 3 of this title; 26
2. is certified under the federal Disadvantaged Business 27
Enterprise Program; or 28
3. is qualified as a small business under Subtitle 2 of this 29
title. 30
14–502.1. 31
(a) (1) This section applies to a procurement by any unit or agency of the 32
Executive Branch of State government for goods, supplies, services, maintenance, 33
construction, construction–related services, architectural services, or engineering services. 34
6 HOUSE BILL 962
(2) This section does not apply to: 1
(i) procurements made under Subtitle 1 of this title; 2
(ii) procurements involving expenditures of federal dollars, to the 3
extent that inclusion in the small business reserve program conflicts with federal law or 4
grant provisions; 5
(iii) procurements with a total dollar value under $50,000; 6
(iv) the procurement of human, social, cultural, or educational 7
services; or 8
(v) term and master contracts exempted under subsection (c) of this 9
section. 10
(b) (1) A procurement with a total dollar value between $50,000 and $500,000 11
shall be designated for the small AND MINORITY business reserve. 12
(2) Each unit or agency shall implement this subsection in a manner 13
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 14
(c) (1) A procurement may be exempt from designation under subsection (b) of 15
this section if the Governor’s Office of Small, Minority, and Women Business Affairs 16
certifies, concurrently with review of any waiver determinations for certified minority 17
business enterprise participation contract goals, that it is not practicable to do so. 18
(2) The Office of State Procurement in the Department of General Services 19
shall assist the Governor’s Office of Small, Minority, and Women Business Affairs in 20
establishing procedures and guidelines for the exemption of procurements under paragraph 21
(1) of this subsection. 22
14–503. 23
(a) The Governor’s Office of Small, Minority, and Women Business Affairs shall 24
adopt regulations to establish procedures for compiling and maintaining a comprehensive 25
bidder’s list of qualified small businesses AND CERTIFIED MINORI TY BUSINESS 26
ENTERPRISE S that shall be posted on the Internet. 27
(b) The Governor’s Office of Small, Minority, and Women Business Affairs shall: 28
(1) establish guidelines for Small AND MINORITY Business Reserve 29
Program administration; 30
(2) ensure agency compliance with the Small AND MINORITY Business 31
Reserve Program; 32
HOUSE BILL 962 7
(3) provide training and technical assistance to agency personnel; and 1
(4) collect data regarding the State’s utilization of small AND MINORITY 2
business reserve vendors. 3
(c) Each unit shall ensure compliance with the regulations set forth in subsection 4
(a) of this section. 5
14–504. 6
(a) Any procurement by a unit of goods, supplies, services, maintenance, 7
construction, construction–related services, architectural services, and engineering 8
services shall be eligible for designation for the small AND MINORITY business reserve. 9
(b) A solicitation for procurement that has been designated for a small AND 10
MINORITY business reserve shall be published in the same manner as required for an 11
invitation for bids as set forth in § 13–103(c) of this article. 12
(c) The procurement officer of a unit shall award a procurement contract 13
designated for a small AND MINORITY business reserve to the small business OR 14
CERTIFIED MINORITY B USINESS ENTERPRISE that submits a responsive bid that: 15
(1) is the lowest bid price; 16
(2) if the invitation for bids so provides, is the lowest evaluated bid price; 17
or 18
(3) is the bid or proposal most favorable to the State within the small 19
business reserve. 20
14–505. 21
(a) Within 60 days after the enactment of the budget bill by the General 22
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and 23
Women Business Affairs that complies with the reporting requirements set forth in 24
COMAR 21.11.01.06. 25
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit 26
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that 27
complies with the requirements of paragraph (2) of this subsection. 28
(2) For the preceding fiscal year, the report shall: 29
(i) state the total number and the dollar value of payments the unit 30
made [to small businesses] under designated small AND MINORITY business reserve 31
contracts TO: 32 8 HOUSE BILL 962
1. SMALL BUSINESSES ; AND 1
2. CERTIFIED MINORITY B USINESS ENTERPRISES ; 2
(ii) state the total number and the dollar value of payments the unit 3
made [to small businesses] under nondesignated small AND MINORITY business reserve 4
contracts, including purchase card procurements, TO: 5
1. SMALL BUSINESSES ; AND 6
2. CERTIFIED MINORIT Y BUSINESS ENTERPRIS ES; 7
(iii) state the total dollar value of payments the unit made under 8
procurement contracts; and 9
(iv) contain other such information as required by the Governor’s 10
Office of Small, Minority, and Women Business Affairs. 11
(c) On or before December 31 of each year, the Governor’s Office of Small, 12
Minority, and Women Business Affairs shall submit to the Board of Public Works and, 13
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a 14
report summarizing the information the Office receives under subsection (b) of this section. 15
14–504.1. 16
(A) THE CERTIFICATION AGE NCY, IN CONSULTATION WITH THE 17
GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS, 18
SHALL DEVELOP AN OUT REACH PROGRAM TO INC REASE THE PARTICIPATIO N OF 19
SMALL BUSINESSES THA T ARE OWNED BY ECONO MICALLY DISADVANTAGE D 20
INDIVIDUALS PARTICIP ATING IN THE SMALL BUSINESS RESERVE PROGRAM. 21
(B) ON OR BEFORE DECEMBER 1 EACH YEAR, THE CERTIFICATION AG ENCY 22
SHALL SUBMIT TO THE BOARD OF PUBLIC WORKS AND, SUBJECT TO § 2–1257 OF 23
THE STATE GOVERNMENT ARTICLE, TO THE LEGISLATIVE POLICY COMMITTEE A 24
REPORT ON: 25
(1) THE STATUS OF THE OU TREACH PROGRAM REQUI RED UNDER 26
SUBSECTION (A) OF THIS SECTION; AND 27
(2) THE TOTAL NUMBER AND DOLLAR VALUE OF AWAR DS MADE TO 28
SMALL BUSINESSES OWN ED BY ECONOMICALLY D ISADVANTAGED INDIVID UALS 29
UNDER DESIGNATED SMA LL BUSINESS RESERVE CONTRACTS. 30
14–505. 31 HOUSE BILL 962 9
(a) Within 60 days after the enactment of the budget bill by the General 1
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and 2
Women Business Affairs that complies with the reporting requirements set forth in 3
COMAR 21.11.01.06. 4
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit 5
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that 6
complies with the requirements of paragraph (2) of this subsection. 7
(2) For the preceding fiscal year, the report shall: 8
(i) state the total number and the dollar value of [payments] 9
AWARDS the unit made to small businesses under designated small business reserve 10
contracts; 11
(ii) state the total number and the dollar value of [payments] 12
AWARDS the unit made to small businesses under nondesignated small business reserve 13
contracts, including purchase card procurements; 14
(iii) state the total dollar value of [payments] AWARDS the unit made 15
under procurement contracts; and 16
(iv) contain other such information as required by the Governor’s 17
Office of Small, Minority, and Women Business Affairs. 18
(c) On or before December 31 of each year, the Governor’s Office of Small, 19
Minority, and Women Business Affairs shall submit to the Board of Public Works and, 20
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a 21
report summarizing the information the Office receives under subsection (b) of this section. 22
Chapter 154 of the Acts of 2012, as amended by Chapters 200 and 201 of the Acts 23
of 2013, Chapter 340 of the Acts of 2017, Chapter 117 of the Acts of 2022, and 24
Chapters 137 and 138 of the Acts of 2023 25
SECTION 2. AND BE IT FURTHER ENACTED, That the Certification Agency, in 26
consultation with the General Assembly and the Office of the Attorney General, shall 27
initiate a study of the Minority Business Enterprise Program AND THE SMALL AND 28
MINORITY BUSINESS RESERVE PROGRAM to evaluate the [Program’s] PROGRAMS’ 29
continued compliance with the requirements of the Croson decision and any subsequent 30
federal or constitutional requirements. In preparation for the study, the Board of Public 31
Works may adopt regulations authorizing a unit of State government to require bidders 32
and offerors to submit information necessary for the conduct of the study. The Board of 33
Public Works may designate that certain information received in accordance with 34
regulations adopted under this section shall be confidential. Notwithstanding that certain 35
information may be designated by the Board of Public Works as confidential, the 36 10 HOUSE BILL 962
Certification Agency may provide the information to any person that is under contract with 1
the Certification Agency to assist in conducting the study. The study shall also evaluate 2
race–neutral programs and other methods that can be used to address the needs of minority 3
businesses. The final report on the study shall be submitted to the Legislative Policy 4
Committee of the General Assembly, in accordance with § 2–1257 of the State Government 5
Article, on or before September 30, 2024, so that the General Assembly may review the 6
report before the 2025 Session. 7
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 8
1, 2024. It shall remain effective for a period of 1 year and, at the end of June 30, 2025, this 9
Act, with no further action required by the General Assembly, shall be abrogated and of no 10
further force and effect October 1, 2024. 11
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.